LONDON: Copper prices remained close to a five-week low on Friday and were on track for a second consecutive weekly decline, under pressure from a strong dollar and concerns about demand prospects.
Three-month copper on the London Metal Exchange (LME) was steady at $8,884.50 per metric ton by 1121 GMT.
The metal, used in power and construction, is down 20% since May when investors’ speculative bets drove the price to a record high of $11,104.5.
The focus towards the end of 2024 turned to a robust U.S. currency – which makes dollar-priced metals more expensive for other currency holders, expectations of higher-for-longer U.S. rates, disappointment over the scale of economic stimulus in top consumer China, and the prospect of U.S. President-elect Donald Trump imposing import tariffs.
All these factors will remain headwinds for the growth-dependent industrial metals as they enter 2025, keeping prospects for demand growth modest, said Natalie Scott-Gray, senior metals analyst at StoneX.
Copper hits 5-week low on selling sparked by dollar jump
Copper and some other metals such as zinc may find support from the supply side as low processing fees challenge the profitability of Chinese smelters in 2025, though this factor will still be limited by modest demand, she added.
So far, Peru said it expects its 2025 copper production to remain flat for the third straight year. Copper and zinc inventories in warehouses monitored by the Shanghai Futures Exchange fell this week and are currently at the lowest since February.
Meanwhile, LME aluminium gained 0.6% to $2,522 a ton, zinc eased 0.1% to $2,965, lead was steady at $1,971 and tin rose 1.2% to $28,705.
Nickel was up 0.4% at $15,170 after hitting its four-year low of $15,065. The market is on track for the third year of surplus in 2024, StoneX said, as Indonesia, the biggest producer, ramps up output.
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