London copper fell 0.8% to $6,382.50 a tonne by 0705 GMT on the London Metal Exchange. This happened due to seasonally weak demand from China. China is the top consumer of the metal. Also the U.S. stimulus package pressured prices of London copper.
This 3 months copper is used often as a gauge to global economic health. The September copper contract is the most traded one on the Shanghai Futures Exchange. It closed up 0.7% at 50,410 yuan ($7,261.70)a tonne which gained it overnight gains in London.
It will take a week to 2 for copper prices to float around the optimal level as the Chinese demand in Q3 remains weak for now. A clear is awaited by the experts and copper analysts. The prices are bound to fluctuate in coming days again as Chile’s state-run miner Codelco which is also world’s largest copper producer, is ramping up the processing capacity of its Chuquicamata underground project.
The months of July and August are traditionally weak for the refined copper consumption. It is especially weaker in the wire-rod sector. September generally experiences a better demand. The prices have also been pressured by the U.S.-China tensions while the U.S. Republican White House and congressional Democrats have been having heated arguments trying to come up with a U.S. coronavirus bill. There are meetings planned between trade officials from both countries.
Shanghai metal exchange has shown that the import arbitrage is closed with China’s copper premiums at bonded warehouses is seen hovering around a four-month low at $81.50 a tonne. The weaker Chinese demand can be seen on rising copper stocks in Shanghai metal exchange.
