Copper prices fell on Friday as markets assessed Chinese government measures to regulate the country’s copper smelting industry, despite a weaker US dollar against most major currencies.

A Chinese state-run media outlet reported on Thursday that the world’s largest copper smelting nation is considering tighter oversight of smelting capacity expansions, at a time when record-low treatment charges have severely squeezed company profits.

Chen Xuexun, vice chairman of the China Nonferrous Metals Industry Association, said during a Wednesday meeting that falling treatment and refining charges (TC/RCs) were the industry’s “most prominent” problem.

He added that the fees miners pay smelters for processing have been hurt by what in China is called “involution-style competition” — a race so intense it becomes self-destructive. This comes after a massive expansion in smelting capacity outpaced mined ore supply, tightening concentrate availability.

Chen said: “Involution-style competition has damaged the interests of the industry and the country, so copper companies must firmly oppose it. The association has proposed specific measures to strictly control the expansion of smelting capacity.”

China’s political leaders announced in early July that they would act against “disorderly price competition,” raising hopes in the sector for supply-side reforms in industries suffering from overcapacity. That move pushed up prices of commodities such as lithium and coal that month.

However, copper prices in July barely moved, even as output dropped 2.5% from June’s record levels.

Treatment charges fell to all-time lows, to the point that some Chinese smelters agreed to process copper for Chilean miner Antofagasta with no fees under a long-term contract. Spot charges have remained negative since last December.

Risks facing Chinese smelters — also the world’s biggest copper consumers — have increased further after Freeport-McMoRan cut its copper production outlook in Indonesia, which analysts said helped push copper prices higher.

Three-month benchmark copper on the London Metal Exchange rose 1.02% to $10,442 per metric ton by 10:09 GMT on Thursday, after earlier hitting a 15-month high.

Wednesday’s industry meeting was attended by representatives of China’s major copper smelters, including Jinchuan Group, Jiangxi Copper, Tongling Nonferrous, China Copper, Daye Nonferrous, China Minmetals, and Zijin Mining, according to the state-backed China Nonferrous Metals News.

Meanwhile, the US dollar index fell 0.4% to 98.1 by 15:51 GMT, after hitting a high of 98.5 and a low of 98.1.

In trading, December copper futures fell 0.7% to $4.72 per pound by 15:57 GMT.

Bitcoin fell below $110,000 on Friday, heading for a sharp weekly loss as the market braced for the expiration of nearly $22 billion in crypto options, while investors remained cautious ahead of key US inflation data.

The world’s largest cryptocurrency dropped 1.8% to trade at $109,552.6 by 02:20 AM ET (06:20 GMT), after earlier slipping below $109,000 — its lowest level in six weeks.

Bitcoin is on track for a weekly decline of more than 5%, with other altcoins also poised for heavy weekly losses.

Bitcoin falls ahead of massive options expiry

The expiry of options contracts scheduled for 08:00 GMT on Friday marks the end of the third quarter, placing downward pressure on Bitcoin and other digital assets.

According to derivatives exchange Deribit, more than $17 billion worth of Bitcoin options were set to expire, with a large portion of open interest concentrated in bullish contracts.

Reports indicate that such large expirations can exacerbate price volatility, especially if key support levels fail to hold.

Earlier in the week, Bitcoin’s slide was attributed to a wave of liquidations in derivatives markets, which erased nearly $1.5 billion from crypto markets. Reports noted that selling intensified as traders maintained directional bets through options contracts that benefit from sharp moves, underscoring the market’s ongoing volatility.

Fed outlook in focus; PCE inflation data awaited

Meanwhile, recent US economic data reduced expectations for aggressive Federal Reserve rate cuts.

Second-quarter GDP growth was revised up to an annualized 3.8% on Thursday, fueling speculation that the central bank may adopt a more cautious stance toward monetary easing.

Investors now await the release of the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, for additional signals on monetary policy direction.

TeraWulf plans $3 billion data center expansion

TeraWulf Inc. (NASDAQ: WULF) plans to raise about $3 billion to finance data center expansion through a financing structure backed by Google (NASDAQ: GOOGL), CFO Patrick Flury told Bloomberg.

The Bloomberg report added that Morgan Stanley is arranging the potential deal for TeraWulf, noting it could be executed via high-yield bond markets or leveraged loans.

Oil prices rose on Friday, heading for weekly gains of more than 4%, after Ukrainian attacks on Russian energy infrastructure prompted Moscow to cut fuel exports.

Brent crude futures gained 13 cents, or 0.2%, to $69.55 a barrel by 09:10 GMT, while US West Texas Intermediate (WTI) rose 16 cents, or 0.3%, to $65.14.

Tamas Varga, an analyst at PVM, said: “The geopolitical risk premium, which had been building over the past two months as Ukraine intensified its drone attacks, has now translated into an actual supply shortfall, hurting Europe, which is structurally short of middle distillates.”

Both benchmarks are on track for their biggest weekly gains since mid-June.

Russian Deputy Prime Minister Alexander Novak announced on Thursday that Russia would impose a partial ban on diesel exports until the end of the year and extend the existing ban on gasoline exports.

Reduced refining capacity has already left several Russian regions facing shortages of certain fuel grades.

Daniel Hynes, an analyst at ANZ Bank, noted that NATO’s warning of a response to any further violations of its airspace has heightened tensions stemming from the war in Ukraine, raising the likelihood of additional sanctions on Russia’s oil industry.

On the supply side, two Iraqi oil ministry officials told Reuters on Thursday that oil flows from Iraq’s Kurdistan region to Turkey would resume on Saturday.

Capping some of the gains, the US Commerce Department reported that GDP rose at an upwardly revised annualized pace of 3.8% in the last quarter, according to the latest figures from the Bureau of Economic Analysis released Thursday.

Stronger-than-expected economic data could make the Federal Reserve more cautious about continuing to cut interest rates, after last week’s 25-basis-point reduction — its first since last December.

The dollar held steady against the euro and the British pound on Friday, maintaining strong gains as investors awaited US consumer spending data, after growth figures came in better than expected, reducing expectations for further Federal Reserve easing this year.

The euro traded near a three-week low at $1.1669, while the pound stabilized at $1.3347 after hitting its lowest in nearly two months on Thursday. The yen traded at an eight-week low after US President Donald Trump announced a new package of tariffs, including a 100% tax on branded pharmaceuticals, 25% on heavy trucks, and 50% on kitchen cabinets.

Limited reaction in currency markets on expectations of exemptions

Shares of major European pharmaceutical companies steadied after an early drop, as analysts noted that exemptions for firms building factories in the United States could mean the impact will be limited for regional giants such as Roche and Novo Nordisk.

Nick Rees, head of macroeconomic research at Monex Europe, said: “It’s not surprising to see the limited reaction in currencies, as markets have already been through several rounds of such measures and tend to view the announcements as positioning by the White House.” He added that bilateral trade deals several countries signed with the Trump administration were not as destabilizing as initially feared, easing market sensitivity.

The dollar index, which measures the US currency against a basket of major peers, was heading toward its biggest weekly gain in two months, after US data on growth, jobless claims, durable goods, and wholesale inventories all exceeded expectations on Thursday.

Rate-cut bets shrink

Attention now turns to the release of US consumer spending data later on Friday for further clues on whether the economy needs additional Fed stimulus.

According to the CME FedWatch tool, investors are now pricing a 12% chance of no rate change next month, up from 8.1% the previous day. Total easing priced in by year-end has also declined to less than 40 basis points.

On Thursday, the US Commerce Department reported that GDP growth was revised up to 3.8% for April through June, compared with an initial estimate of 3.3%. Economists polled by Reuters had not expected this upward revision. The Personal Consumption Expenditures (PCE) price index — the Fed’s preferred inflation gauge — is expected to show a 0.3% monthly rise in August and a 2.7% annual increase, according to a Reuters survey.

Bansi Madhavani, senior economist at ANZ, said: “At a time when Fed members are concerned about high inflation, we think such a report would be encouraging.” She added that as long as monthly inflation data continue to signal an upward trend, “we expect the Fed to continue gradual easing with 25-basis-point cuts.”

In Japan, where the central bank is pursuing monetary tightening, data showed Tokyo core inflation in September remained above the 2% target, keeping expectations for an imminent rate hike alive.

In cryptocurrency markets, Bitcoin rose 0.4% to $109,639.28, while Ether gained 1.3% to $3,939.60.