Copper futures dropped below $4.10 per pound on Friday, extending losses from the previous session as the dollar continued its upward trajectory.
Copper prices extend decline amid dollar strength
The strength of the dollar was fueled by expectations that US president-elect Donald Trump’s policies, particularly those related to tariffs, immigration, and taxes, could drive inflation and constrain the Federal Reserve’s ability to reduce borrowing costs. Additionally, concerns about a lack of sufficient stimulus measures from China, the world’s largest copper consumer, added to the bearish sentiment regarding demand. Investors are now closely monitoring China’s upcoming decision on its one-year medium-term lending facility rate, hoping for further policy support.
Inventories in China decrease
Meanwhile, copper spot treatment and refining charges in China showed signs of recovery, as smelters reduced output following years of rapid expansion. Copper inventories in China have also been declining, now sitting below August levels, with only seven days' worth of supply readily available.
