Shanghai copper prices fell for a second day, as investors focused on tensions between the United States and top metals consumer China, whose annual parliament meeting continues this week, and as supply constraints eased.
While copper stocks in Shanghai Futures Exchange warehouses dropped at the fastest rate in nearly eight months last week, China’s copper consumption is weakening as a backlog of factory orders clears and the call on refined metal to replace limited scrap supply fades, Jinrui Futures said.
“The conflict between China and the United States around Huawei and Hong Kong is also escalating,” the brokerage added in a note.
Supply-side support for copper prices is also weakening with the resumption of some mining in South American countries after coronavirus-related closures, Jinrui Futures added.
The London Metal Exchange is closed on Monday for the Spring Bank Holiday and reopens on May 26.
The most-traded July copper contract on the ShFE fell as much as 1.2 per cent to a one-week low of 43,210 yuan ($US6,054.36) a tonne, before closing 0.2 per cent lower at 43,650 yuan.
China’s Tongling Nonferrous will in July start up a new 400,000 tonnes per year copper smelting project in Inner Mongolia after shutting down an older plant, a government statement said.
Workers at China Molybdenum’s Tenke Fungurume copper-cobalt mine in Democratic Republic of Congo ended a one-day strike on Sunday after agreeing a compromise with management over compensation for working in isolation.
The ShFE complex ended mixed, with nickel closing down 2 per cent and zinc ending 0.2 per cent lower, while lead closed up 1.7 per cent, aluminium gained 0.3 per cent and tin finished flat.