Copper declines to two-week trough ahead of Powell's statements

Copper prices fell on Wednesday to their lowest level in nearly two weeks as investment funds moved to sell, while consumers and producers remained cautious ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech later this week, according to metals traders.

Commodity and financial markets are awaiting signals from Powell’s remarks on Friday regarding whether the Fed will cut interest rates by 25 basis points at its September 16–17 meeting, a move that could weigh on the dollar. A weaker US currency typically boosts demand for dollar-denominated metals, a dynamic fund managers are exploiting in daily trading strategies that rely on algorithmic signals.

Benchmark copper on the London Metal Exchange slipped 0.1% to $9,676 per metric ton by 10:23 GMT, after earlier touching $9,673.50, its lowest since August 7. Alistair Munro, senior base metals strategist at Marex, noted that “systematic flows are dominating the market in the absence of broader participation,” adding that expectations remain uncertain with the market struggling to gain direction.

Longer-term concerns over demand, particularly from China — the world’s largest copper consumer — have widened the discount between spot copper and the three-month contract to around $100 per ton, the highest since February. Weak appetite is also reflected in the Yangshan copper premium, a key gauge of China’s import demand, which has fallen to $47 per ton compared with levels above $100 in May. Technically, upward resistance is seen around $9,475 per ton, where the 21- and 50-day moving averages converge.

Traders also reported fund selling in aluminum, which briefly broke below its 200-day moving average at $2,565 per ton. Three-month aluminum earlier touched a two-week low at $2,558 before recovering 0.2% to $2,569.

Among other metals, zinc rose 0.2% to $2,773, while lead fell 0.3% to $1,967, tin slipped 0.2% to $33,780, and nickel dropped 0.5% to $14,935 per ton.