Copper Prices Plummet on LME Inventory Surge and Stronger Dollar

Copper prices have fallen to their lowest level since August due to a combination of factors. The London Metal Exchange (LME) warehouse inventories have risen nearly 20% since mid-August, reaching 242,900 tons after traders took advantage of the price gap between contracts.

The LME-registered copper inventories increased as traders delivered metal into warehouses and sold it quickly to take advantage of the premium on near-term contracts. However, this structure flipped into discounts last week, removing the incentive for further deliveries and potentially slowing down the inflow of metal into warehouses.

The stronger US dollar has also added pressure on copper prices, making them more expensive for non-US buyers. Additionally, higher oil prices can raise costs and weigh on growth expectations, creating uncertainty in the market.