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Copper prices fell further on Tuesday, pressured by weak import data from leading metals consumer China and the potential resumption in supplies from a major mine in Peru.
Benchmark copper HG1! on the London Metal Exchange (LME) traded 0.8% down at $8,852 a tonne in official rings.
“Copper trades lower on a combination of weak China imports and easing tensions in Peru pointing to a recovery in shipments,” said Ole Hansen, head of commodities strategy at Saxo Bank in Copenhagen.
Copper, used in the power, construction and transportation sectors, has lost about 7% since reaching a seven-month high of $9,550.50 in January.
The retreat has been driven by a strong dollar and the relatively slow revival of demand in China after it abandoned strict COVID-19 controls.
China’s unwrought copper imports in January and February were down 9.3% from a year earlier, customs data showed on Tuesday. China’s total imports dropped as well.
The Chinese import data should not have a big effect on the market because any post-pandemic demand recovery had yet to emerge at that time, Hansen said.
Large copper mines in Peru, the world’s second-biggest copper producer, are cranking up activity again after protests and blockades dented production, power data analysed by Reuters showed.
The U.S. dollar index DXY was up, reflecting strength that makes dollar-priced metals more expensive for buyers holding other currencies.
Foreign currency markets are focused on two days of testimony by Federal Reserve Chair Jerome Powell to Congress, which could provide a steer on the U.S. central bank’s interest rate policy.
Source: Reuters