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Higher Inventories, Smaller Chinese Imports Impact Copper Futures

January 23, 2018 at 17:31 by Andrew Moran

Copper futures plunged more than 2% on Tuesday as new data negatively impacted the industrial metal. Higher inventory levels, a decrease in Chinese copper imports, and early US dollar gains sent the red metal to its lowest level since the middle of December.

March copper futures tumbled $0.0745, or 2.33%, to $3.124 per pound at 16:14 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The industrial metal is poised to settle at its worst level in about a month.

Year-to-date, copper prices have slipped more than 5%.

Copper is taking a hit on reports of greater inventory levels, buoyed by China’s output, which climbed by 16.7% year-on-year in December. But China’s imports fell nearly 20% last month compared to the same time a year ago.

At the start of Tuesday’s trading session, the US dollar was up as much as 0.2% before paring those gains. The greenback slid 0.15% in intraday trading, which is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.

The red metal was unable to take advantage of the leaks pertaining to President Donald Trump’s $1 trillion infrastructure plan. According to Axios, the White House draft makes improving the electric grid and the clean water supply a priority rather than new roads, bridges, and other unsustainable projects. Last year, when Trump was successful in his bid for the Oval Office, he pledged to spend $1 trillion over 10 years on infrastructure, propelling copper to its best weekly performance in more than 30 years.

Other metals are mixed. February gold futures rose $5.29, or 0.40%, to $1,337.20 per ounce. March silver futures fell $0.06, or 0.38%, to $16.92 an ounce. April palladium futures shed $8.30, or 0.76%, to $1,084.00 an ounce. April platinum futures surged $10.60, or 1.06%, to $1,007.40 per ounce.

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