According to The Wall Street Journals, China accounts for 40% of the world’s copper demands.
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China to face decline in copper imports for the next year as the response of its weak domestic demand on copper driven by slowing economy in the country. The dollar appreciated to its strongest level since April this week versus the euro and its highest in more than two months versus the yen after a Labor Department report showed USA employers added 271,000 workers in October, the most this year.
Another major setback for copper prices came after dollar jumped to three-month high as FOMC, in its latest meeting, significantly raised the prospect of a historic rate rise at its next meeting in December by removing cautious statements about unstable worldwide markets could affect the U.S. economy. “I do feel it is an overreaction, but I also would be very reluctant to say when it will stop because there is momentum and it can become quite self-fulfilling”. Concerns metals demand is ebbing deepened as Codelco, the biggest copper producer, cut its surcharge for sales to China by 26 percent next year, according to two buyers.
Copper futures for December delivery fell 0.7 per cent to settle at $US2.1115 a pound at 1.16pm on the Comex in NY, after touching $US2.075 a pound, the lowest since May 2009.
“Codelco is trying to secure market share. It doesn’t mean demand for final use is going to be lower, it just means the sourcing is different”, Capital Economics’ Bain said.
“We’ve not had enough production cutbacks to rebalance the market, so a further fall in the price should act as a necessary incentive in an oversupplied market to force more output cuts”. Glencore, the world’s third-largest copper miner, said it will eliminate an additional 55,000 tonnes of output by the end of 2017.
Wu Yuneng, a vice president at China’s biggest smelter Jiangxi Copper Co., said supply and demand will be in balance in 2015 and for the next several years.
“Prices are facing headwinds first and foremost from speculative financial investors”, Commerzbank said in a note. It ended 0.1 per cent down at $US4,684.
Zinc was down 2.1 per cent at $US1,587, lead slid 0.9 per cent to $US1,596.5, tin lost 0.3 per cent to $US14,700 and nickel fell 1.2 per cent to $US9,310 a tonne.
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Three-month copper on the London Metal Exchange wallowed down 0.4 percent at $4,806 a tonne by 0229 GMT, after earlier plumbing its weakest since July 2009 at $4,783 a tonne.
