Copper Prices Fall on Geopolitical Tensions and Stronger US Dollar
Copper prices continued to decline on Monday as escalating geopolitical conflicts pushed energy prices higher and reignited inflation concerns. The London Metal Exchange (LME) copper price opened at $14,085/mt, hit a high right at the open, then drifted lower throughout the session to a low of $13,958/mt before settling at $14,024.5/mt, down 1.42%. Trading volume reached 27,000 lots, and open interest stood at 274,000 lots, down 1,215 lots from the previous trading day.
The Shanghai Futures Exchange (SHFE) copper price also declined, opening at 106,900 yuan/mt, hitting an intraday high of 107,020 yuan/mt before drifting lower to a low of 106,650 yuan/mt and finally settling at 106,920 yuan/mt, down 3.29%. Trading volume reached 50,000 lots, and open interest stood at 185,000 lots, down 3,283 lots from the previous trading day.
Supply remained tight overall as domestic copper and imported cargoes arrived in small volumes, with limited available supply in the market. Demand side, the traditional peak season combined with downstream dip-buying led to some recovery in demand, though overall buying remained largely need-based. As of Monday, September 14, SMM copper inventories across major Chinese regions rose 5,200 mt WoW to 90,300 mt, down 63,900 mt from 154,200 mt in the same period last year.
Overall, copper prices are expected to drift lower today as risk-off sentiment combined with expectations of rising interest rates drove the US dollar stronger, weighing on copper prices.