Copper Prices Rise Amid Chinese Stimulus Plans and Weaker Dollar
Copper prices have risen due to Chinese economic stimulus and a weaker dollar, despite concerns over U.S. tariffs and their impact on global growth. Key metals also experienced gains as traders assess market conditions ahead of important U.S. economic reports.
Copper prices saw an increase on Monday, spurred by China’s latest economic stimulus initiatives and a weakened dollar. Traders are closely monitoring the potential risks associated with U.S. tariffs and their implications for global economic growth. The benchmark three-month copper price on the London Metals Exchange rose by 0.4%, reaching $9,821 per metric ton after hitting a high of $9,850 the previous Friday, marking its peak since October 9.
In conjunction with the stimulus plan aimed at enhancing domestic consumption, China disclosed new data projecting higher-than-expected figures for consumption, investment, and industrial production for the months of January and February, according to Ewa Manthey, an analyst for ING commodities. However, concerns linger regarding the real estate sector, which is crucial for metals demand, as home prices continue to decline month-on-month.
Looking at the broader picture for metals dependent on growth, U.S. import tariffs coupled with increasing trade tensions globally present significant long-term risks. President Donald Trump indicated he has no plans to exempt steel and aluminum tariffs, with reciprocal tariffs set to take effect on April 2. This has also led to a rise in the premium between U.S. Comex copper futures and LME contracts due to his discussions on potential new copper tariffs.
On the currency front, the dollar remained near a five-month low, with all eyes on upcoming U.S. retail sales data and the Federal Reserve meeting set for Wednesday, where no changes in interest rates are anticipated. Additionally, LME aluminum climbed by 0.7% to $2,699 per ton, while registered warehouse stocks dropped by 4,525 tons, reaching the lowest level since May. China’s aluminum output increased by 2.6% to 7.32 million tons during the first two months of the year, suggesting sustained production capabilities.
In the metals market, other commodities also experienced gains: zinc rose 0.4% to $2,984.50 a ton, lead increased by 1.1% to $2,091, tin saw an uptick of 0.4% to $35,270, and nickel was up 0.9% at $16,610.
In conclusion, copper prices are bolstered by China’s economic stimulus plans and the impact of a weaker dollar. However, significant concerns regarding U.S. tariffs and their potential repercussions on global trade remain crucial to monitor. The general uptick in various metal prices indicates a positive response to these developments, albeit the real estate sector’s challenges in China may dampen longer-term demand.
Original Source: www.tradingview.com
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