Copper prices plummet due to US dollar strength

Copper prices took a hit on Thursday as a result of various factors impacting the market. The three-month copper price on the London Metal Exchange (LME) fell by 0.9% to $10,325 per metric ton, while the June copper contract on the Shanghai Futures Exchange (SHFE) dropped by 4% to 83,230 yuan ($11,492.05) per ton.

The decline in copper prices can be attributed to a stronger US dollar, which rose after the Federal Reserve hinted at a potential interest rate hike. As copper is priced in US dollars, the appreciation of the currency makes it more expensive for buyers. Moreover, the demand for copper in China, the largest consumer of the metal, has decreased due to earlier price surges this year, resulting in higher inventories.

Alongside copper, other base metals also experienced downward trends. LME aluminium decreased by 0.2% to $2,631 per ton, nickel saw a 1.1% drop to $20,145, zinc shed 0.6% to $3,043, tin remained stable at $33,500, and lead declined by 0.6% to $2,301. On the SHFE, aluminium lost 2.2% to 20,910 yuan per ton, zinc dropped by 2% to 24,395 yuan, tin decreased by 2.2% to 272,790 yuan, lead slid by 0.6% to 18,440 yuan, and nickel was down by 3.6% to 152,080 yuan.

The decline in copper prices, influenced by a stronger US dollar and reduced demand in China, has had a ripple effect on other base metals as well. Investors and market analysts will be closely monitoring these developments to gauge the future trajectory of the metals market.