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Strengthening US Dollar Sends Copper to Two-Week Low

October 6, 2016 at 17:28 by Andrew Moran

Copper prices have hit a two-week low on a strengthening US dollar. The industrial metal has been one of the top performing commodities in 2016, which reverses the trend of the last few years.

December copper futures declined 0.7% to $2.1490 per pound at 16:50 GMT on Thursday on the Comex division of the New York Mercantile Exchange. Copper prices have not traded this low since September 20. Copper did not experience greater volatility on Thursday because it is a national holiday in China.

US traders are biting their nails in anticipation of Friday’s September jobs report. If the employment figures beat expectations then it could drive the greenback even further. This would make the copper rebound weaken even further.

Even with positive economic news in the US, analysts are still alluding to the fact that China will continue to be the main driver for copper for the rest of the year. The world’s second-largest economy accounts for roughly half of metal’s global consumption. It is estimated that China will have consumed about 22 million tonnes this year. This is due to China’s energy sector, which requires a lot of copper.

Meanwhile, its metal partners are presenting some gains. Aluminum prices went up 0.1% to $1,677 per tonne. Zinc prices rose 1% to $2,320 a tonne. Lead prices jumped 0.5% to $2,054.50 per tonne.

Last month, copper prices rose considerably because of a supply disruption in Chile. The Latin American country, which represents 20% of the planet’s refined copper supply, experienced stormy weather that impacted cargoes and shipments.

It was also reported last week that the Philippines government will likely avoid shutting down operations at all 20 copper mines. These facilities faced suspension over environmental violations, but officials said it will instead give them ample time to address the matter.

These factors have assisted in copper prices stabilizing.

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