Copper market’s biggest whale fuels speculation of a major shift
The world’s single biggest buyer of copper, State Grid Corp. of China, has slowed its purchases of copper wire this year.
Copper fell after US inflation data came in slightly above expectations, pausing a rally that has seen the metal hit a 15-month high.
The metal pared this week’s gains following a report showing consumer price increases hadn’t slowed as much as expected. The data will make it harder for the Federal Reserve to justify cutting interest rates in June, potentially weighing on demand.
The broader backdrop for copper is positive, however, with the metal up about 10% this year. Analysts at Bank of America Corp. and Citigroup Inc. argued that mine supply will struggle to match demand growth from areas like renewable energy and electric-vehicle infrastructure.
Still, there are other reasons for caution. Spot copper is trading at a $130-a-ton discount to 3-month LME futures — a so-called contango structure that can indicate ample immediate supply. Global inventories are near the highest since June 2020 and spot sales in China are also trading at a discount to futures contracts.
Copper declined 0.8% to $9,345.50 a ton at 2:40 p.m. in London. Zinc and tin also edged lower.
(By Jack Ryan)
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