May 23, 2024 (MLN): Copper fell for a third day as Chinese factories balked at paying record prices, while hawkish comments from Federal Reserve officials also pressured base metals, as Bloomberg reported.
After surging to an all-time high on Monday on bets the global market will tighten dramatically in coming years, copper has fallen about 5%.
Prices on Wednesday had their biggest intraday drop in nearly two years amid profit-taking and new signs of demand weakness in China, the largest metal consumer.
Chinese factories are struggling to pass on the surging costs of copper to clients making products ranging from air—conditioners to home electronics.
In the US, minutes from the May Federal Open Market Committee meeting showed concern over “disappointing” price increases.
The central bank may hold rates higher for longer “should inflation not show signs of moving sustainably toward” its 2% target. That could put a dampener on global economic growth.
The record rally for copper was “showing signs of easing,” Jinrui Futures Co. said in a note. Still, China’s vow to step up stimulus along with expectations supplies will tighten may support elevated prices in the near term, it said.
Copper fell 0.3% to $10,392 a ton on the London Metal Exchange as of 11:11am in Shanghai. Other industrial metals also dropped.
Meanwhile, iron ore declined 1.4% to $120.75, on track for its first daily decline after five consecutive gains. Futures in Dalian fell, along with steel prices in Shanghai.
