Copper futures fell to around $4.31 per pound on Monday, retreating from two-month highs as market sentiment remained cautious.
Copper falls on China’s rate hold, supply cut
This decline followed China's central bank's decision to keep key lending rates unchanged for the third consecutive month in its January policy fix, despite the government’s ongoing commitment to stimulate domestic consumption. Market participants also adopted a wait-and-see approach ahead of Donald Trump’s inauguration, seeking more precise signals on his potential economic policies, particularly about tariffs.
However, optimism persists that China will continue to deliver on its promises of additional economic stimulus. State media reports indicate that the People’s Bank of China may lower the reserve requirement ratio for banks before the Spring Festival, which could further support the economy.
Chile cuts long-term copper production forecast
On the supply side, Chile, one of the world’s largest copper producers, revised its long-term copper production forecast. The country expects to produce 5.54 million tons of copper by 2034, a downward revision from the previous estimate of 6.34 million tons, reflecting potential supply constraints in the years ahead.
