Commodities

Weak dollar, light trading volumes pull copper futures down

Reuters Sydney | Updated on January 16, 2018 Published on December 29, 2016

copper

Shanghai copper futures followed the London contract lower on Thursday as the US dollar sagged in Asia, with light trading in commodities and questions over whether the widely used metal can maintain its stellar 2016 performance next year.

Three-month copper on the London Metal Exchange eased 0.4 per cent to $5,522 a tonne by 0154 GMT, following modest gains in the previous session.

The most-traded copper contract on the Shanghai Futures Exchange was 0.2 per cent lower at 45,540 yuan ($6,548) a tonne.

“The weaker dollar and light volumes as the end of the year approaches kept a lid on most of the metals,” said a trader in Sydney.

“On top of that, there’s a lot of uncertainty about where the growth will come from next year - how much China will grow, or Trump’s vision to rebuild the US.”

Copper, found in everything from toilet taps to microchips, is up around 20 per cent this year and on track for its largest annual rise since 2010.

But analysts have raised concerns about China’s property market, pointing to moves to limit property speculation in 2017, which could curb construction activity with a consequent impact on the metal.

Copper broke above $6,000 a tonne in November after Donald Trump won the US election, boosting hopes of infrastructure spending and higher consumption. But the uplift was short-lived, with prices receding since.

The United States accounts for only about 8 per cent of the roughly 22 million tonnes-per-year global market.

China, on the other hand, is the world’s top consumer of the metal.

In other metals trading, ShFE zinc was 1.9 per cent higher. Nickel was down 0.35 per cent and tin traded 0.18 per cent higher.

Published on December 29, 2016
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