The copper price was down on Monday despite expectations of weakening demand reinforced by manufacturing data from around the world, a strong dollar, and rising inventories in warehouses approved by the London Metal Exchange.
Copper for delivery in December fell 0.9% from Friday’s settlement price, touching $3.40 per pound ($7,480 per tonne).
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“It’s clear we will have lower demand and potentially lower prices into the latter part of this year,” said Bank of America analyst Michael Widmer.
“The uncertainty is how hard the slowdown will be and what the full impact on industrial metals demand will be.”
Chinese factory activity contracted at a sharper pace in September as strict covid-19 lockdowns disrupted production and hit demand for Chinese goods.
Manufacturing activity across the euro zone and Asia weakened in September in the face of continuing cost pressures.
“The European winter will be another key inflection point,” said Edward Meir, an analyst at ED&F Man Capital Markets.
“However, we think that things in Europe – barring a harsh winter – will not be as dire as expected given that an impressive measure of energy planning and preparation (and conservation) has taken place.”
Copper stocks in LME warehouses are up more than 30% since September at 135,750 tonnes while canceled warrants dropped to 6% from 50% on August 26.
(With files from Reuters)