Copper heads lower on stronger dollar, Chinese demand concerns

Copper prices fell on Friday as the dollar strengthened against most major currencies, alongside concerns over Chinese demand and rising warehouse inventories.

The Yangshan copper premium rose 1.8% to $58 per ton, the highest level in three months.

The Chinese yuan hit a one-week high against the US dollar, making dollar-denominated metals more attractive to Chinese buyers.

Meanwhile, China’s imports of unwrought copper reached 425,000 tons in August, down from July but higher than a year earlier. Imports of copper concentrates climbed to 2.76 million tons, the highest level in four months.

Analysts at ANZ Bank said in a note: “Falling treatment charges have failed to curb China’s appetite for copper concentrates. Favorable import parity factors and expectations of weaker domestic production are likely to keep refined copper imports strong in September.”

On the trade side, overall Chinese export growth slowed in August to its weakest pace in six months, while imports rose 1.3%, compared with 4.1% growth in the previous month.

Registered copper inventories at the London Metal Exchange stood at 155,825 tons, with outflows of 2,125 tons across several locations, along with a fresh 8,500-ton cancellation in South Korea, according to daily exchange data.

Separately, the US dollar index rose 0.2% to 97.7 points at 16:24 GMT, after hitting a high of 97.8 and a low of 97.4.

In US trading, copper futures for December delivery fell 0.2% to $4.65 per pound as of 16:31 GMT.