Copper returns lower as dollar gains ground

Copper prices fell on Thursday as the dollar gained modest ground against most major rivals, pressuring dollar-denominated industrial metals. 

Copper May futures rose 2.1% back on Monday at the Shanghai Exchange to a record 75.17 thousand yuan per tonne.

Back then, the dollar was weakened and investors still had hopes that the Federal Reserve will cut interest rates in June. 

However, strong US employment and inflation data dashed such hopes, with investors dismissing the possibility of a Fed rate cut in June or even in July. 

US consumer prices rose 3.5% y/y in March, above estimates of 3.4%.

On a monthly basis, consumer prices rose 0.4%, while analysts expected a rise of 0.3%. 

Analysts noted that copper demand from AI and data center companies alone could reach a million tonnes by 2030 and will lead to an increased deficit. 

A change towards relying on EV cars and renewables is expected to increase copper consumption in the next few years as the world moves towards controlling carbon emissions. 

The Trafigura Company’s analysts estimate copper deficits to range between 4 and 5 million tonnes by 2030.

Otherwise, the dollar index rose 0.1% as of 15:58 GMT to 105.3, with a session-high at 105.5, and a low at 105.03. 

Copper futures due in May fell 0.8% as of 15:53 GMT to $4.24 a pound.