The copper price extended its decline on Tuesday, after dropping the most in nearly two weeks in the previous session, on investors’ concerns about subdued global macroeconomic outlook due to a fresh surge in coronavirus cases in Europe and North America.
Copper for delivery in September fell 2.2% from Monday’s settlement price, touching $4.23 per pound ($9,306 per tonne) on the Comex market in New York.
The most-traded September copper contract on the Shanghai Futures Exchange fell 0.6% to 69,820 yuan ($10,777.35) a tonne, tracking overnight losses in London.
As a gauge of global economic health, the copper price has been weighed down by possible policy tightening in some major economies and rising global coronavirus cases, which could drag on recovery.
Top consumer China announced this week that its refined copper imports fell for the fourth straight month in July, adding to the sense of lost momentum.
Click here for an interactive chart of copper prices
“The lack of excitement reflects a dearth of speculative interest in copper right now, with fund positioning low on the LME, the CME and the Shanghai markets,” said Reuters columnist Andy Home.
“Macro headwinds in the form of slowing growth impetus in China and the spread of the Delta variant of covid-19 are currently outweighing copper’s micro-dynamics in investor minds.”
Goldman Sachs suggests that while Chinese demand has got copper to where it is, struggling supply will provide the next lift in price.
According to the bank, the tension between macro negativity and micro positivity is “particularly acute for copper,” given a structurally challenged supply chain.
(With files from Reuters and Bloomberg)