Copper prices on the London Metal Exchange (LME) dipped to a two-month low on Wednesday, influenced by a strong U.S. dollar and weak demand prospects in China, the world’s largest consumer of the metal. Benchmark copper was down 0.2% at $9,143 per metric ton by mid-morning in London, having dropped from an earlier session low of $9,094, marking a decline of over 6% since the recent U.S. presidential election.
Traders attributed copper’s slump to a resilient dollar, which raises the cost of dollar-denominated metals for other currency holders, potentially curbing demand. Disappointment over China’s recent stimulus measures, which have yet to significantly boost manufacturing and real estate sectors, also weighed on copper.
The market awaits U.S. consumer inflation data for further insights on potential Federal Reserve rate cuts. Additionally, concerns over possible expanded U.S. tariffs on Chinese imports under the incoming Republican administration are adding to bearish sentiment. Liberum analyst Tom Price noted that similar tariffs previously pressured commodity markets in 2018-19.
Reflecting China’s tepid demand, the Yangshan copper premium—a key gauge of China’s copper import appetite—has fallen 30% since early October. The broader industrial metals market continues to face global demand softness, with cash discounts persisting over three-month LME contracts. Other metals also saw declines, with zinc down 0.4%, lead sliding 0.6%, tin retreating 1.5%, while aluminium and nickel remained mostly steady.
