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Copper Prices Drop amid Mixed Bag of Information

September 26, 2017 at 16:42 by Andrew Moran

Copper futures are continuing their declines as the industrial metal shed as much as 1% on Tuesday. Traders in the red metal are combing through a bag of mixed information, some that may be bullish for copper, and some that may impact the global market.

December copper futures tumbled $0.022, or 0.75%, to $2.915 per pound at 16:24 GMT on Tuesday. Copper prices are trading at their lowest levels since the end of August. Copper has also plunged roughly 5% since the first week of September, when it was trading at a three-year high of $3.12.

It has been an interesting week for copper because of the plethora of information coming in.

According to the Asian Development Bank, China, the world’s largest consumer of copper, will see its economy grow at a higher-than-expected rate this year, thanks to an export recovery and growth in services. Also, it is being reported that there will be an increase in refining capacity in China, which would help reduce refining and treatment charges by smelters.

On Monday, the Brazilian government announced that it will restore a mining ban on a massive area of the rain forest over concerns of deforestation. This would negatively affect any mining opportunities for firms. Meanwhile, in Guinea, the top mining companies have resumed operations as law enforcement officials have quashed any disruptions to production capacities.

Commodities have taken a hit on Tuesday thanks to a surging US dollar. The greenback jumped 0.58%. A stronger US dollar is bad for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

Moreover, the rising geopolitical tensions between North Korea and the US is prompting investors to move away from commodities like copper and into safer assets.

Other metals are bleeding red ink on Tuesday. December gold futures slid $7.60, or 0.58%, to $1,303.90 per ounce. December silver futures rose $0.21, or 1.27%, to $16.93 an ounce. October platinum futures fell $13.20, or 1.40%, to $927.00 an ounce. October palladium futures rose $5.35, or 0.59%, to $915.05.

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