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Copper Prices Plunge 2% on Weak Chinese Demand, US Government Lawsuit

November 28, 2017 at 17:45 by Andrew Moran

Copper futures are trading lower on Tuesday, stemming from lower Chinese demand concerns, a climbing US dollar, and a lawsuit by environmentalists against the US government. This is only one of a few steep drops for the red metal in November.

December copper futures tumbled $0.061, or 1.96%, to $3.073 per pound at 16:31 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. In recent weeks, the industrial metal has retreated from a three-month high as investors fear falling demand from China.

Wall Street analysts have warned over the last week that future demand from the world’s second-largest economy may be smaller than expected. Even the Chinese government has urged investors to be careful of a potential bubble forming in the stock market and that traders should employ a wide array of safeguards to protect their investments.

A stronger US dollar also weighed on copper prices as the greenback rose 0.23%. A strengthening dollar is bad for commodities like copper because it makes it more expensive for foreign investors to buy.

The US copper industry may take a hit heading into 2018. Four environmental and conservation groups filed a lawsuit against the US government to reverse the US Forest Service’s approval of a copper mine in Arizona. The Save the Scenic Santa Ritas, the Center for Biological Diversity, the Arizona Mining Reform Coalition, and the Sierra Club’s Grand Canyon Chapter have submitted a lawsuit in the US District Court in Arizona, arguing that the copper mine will harm water resources and the Coronado National Forest.

Gayle Hartmann, president of Save the Scenic Santa Ritas, said in a statement:

We finally have our day in court before an impartial judge who will consider all the facts and render justice.

We are confident that once all of the facts are presented in court, the Rosemont Mine will be found to be illegal and not allowed to proceed.

Any losses in copper prices were capped by the continuing strikes at copper mines in Peru. Despite the nation attempting to expand production levels, workers have disrupted supplies, hurting the nation’s copper market. It should be noted that the work stoppages have had very little effect on global prices thus far.

Year-to-date, copper has advanced more than 21%.

If you have any questions and comments on the commodities today, use the form below to reply.

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