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Copper prices retreated on Thursday on a stronger dollar and uncertainty ahead of a major Chinese political meeting that could result in further economic stimulus for the world’s biggest metals consumer.
Three-month copper CMCU3 on the London Metal Exchange (LME) edged down 2% to $8,919.5 a tonne by 1042 GMT after gaining 1.6% on Wednesday.
The dollar index, which measures the U.S. currency against six others, was supported by a rise in U.S. Treasury yields on Thursday. A stronger U.S. currency makes dollar-priced metals more expensive for buyers holding other currencies.
“The dollar has been quite strong over the last week and the last month. This is pushing metals down slightly,” said Dan Smith, head of research at Amalgamated Metal Trading.
The dollar index .DXY gained 2.7% in February for its biggest monthly rise since September 2022.
Copper has shed 6% since reaching a seven-month high of $9,550.50 in January, pressured by the strong dollar and relatively slow revival of demand in China after it abandoned strict COVID-19 controls.
China’s annual meeting of the National Party Congress is due to open on Sunday to set economic targets and elect top economic officials.
“The meeting is definitely important. They will be discussing (China’s 2026-2030) new five-year plan, so people are looking at it,” Smith added.
China is becoming increasingly ambitious with its 2023 growth target, aiming as high as 6%, as it builds on its post-pandemic recovery, sources involved in policy discussions told Reuters.
The most-traded April copper contract on the Shanghai Futures Exchange SCFcv1 closed 0.2% up at 69,780 yuan ($10,097.53) a tonne.