Copper futures are slumping on Tuesday, despite new data showing strong demand from China last month. The industrial metal, which has enjoyed a remarkable surge over the past few trading sessions, could be impacted by a mix of a strengthening US dollar and some profit-taking. Overall, copper is joining the decline in the broader metals market.
December copper futures tumbled $0.0235, or 0.77%, to $3.0395 per pound at 18:40 GMT on Tuesday on the New York Mercantile Exchange. Copper prices have soared more than 4% over the last week, adding to their year-to-date rally of nearly 9%.
The General Administration of Customs released trade data from September. Overall, imports and exports popped, narrowing the trade surplus from $58.9 billion in August to $37 billion last month. For the copper market, Beijing’s imports of unwrought copper spiked 62.3%, copper ores and concentrates increased 35.2%, and iron ore climbed 9.3%.
Beijing has been on a copper buying spree since the aftermath of the coronavirus pandemic. China is looking to stockpile domestic inventories of the red metal as the world’s second-largest economy goes through an economic recovery. Analysts’ sentiment has been mixed, with a growing divide as to whether the Chinese economy is rebounding at a fast or sluggish pace.
Motor vehicle sales did surge year-over-year in September by 12.8%. Copper is another important element in the automobile sector.
On the more technical side, the copper market is keeping an eye on ports and cargoes, says Chen Jiyao, head of China Client Advisory, in an interview with Reuters.
“As the impact from typhoon gradually subsided from second-half of September, discharging and clearance of inbound crude cargoes picked up pace. Port operations should continue at high capacity in the near-term. This coupled with reduced inbound flows of fresh cargoes should further draw down floating storage in the coming weeks.”
The greenback could be contributing to the metals markets’ steep decline. The US Dollar Index, which measures the greenback against a basket of currencies, rallied 0.51% to 93.54, from an opening of 93.03. A stronger buck is bad for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.
In other metal commodities, December gold futures plunged $31.40, or 1.6279%, to $1,897.50 per ounce. December silver futures fell $1.031, or 4.08%, to $24.24 per ounce. November platinum futures dropped $4.40, or 0.5%, to $871.90 an ounce. December palladium futures crashed $98.20, or 4.05%, to $2,327.39 per ounce.