Copper lures buyers as New York futures hover above $4/lb
Copper futures edged higher in London and New York as tentative signs of buying interest emerged following a string of losses.
Nickel hit the lowest level since 2020 and copper steadied near a nine-month low on the first trading day of the year, with investors weighing the impact of a rallying dollar and the scope for additional Chinese stimulus.
Prices for nickel, used in stainless steel and batteries, dropped towards $15,000 a ton on the London Metal Exchange, as the dollar added pressure on industrial metals toward the end of the trading day.
The greenback’s rally came as a weekly reading of US jobless claims dropped to an eight-month low, signaling the ongoing resilience of the nation’s economy. A stronger dollar could hurt buying power for manufacturers in countries like China, where there are already worries about the strength of metals demand.
For the year to come, the market is focused on whether there will be a recovery in China’s embattled property sector, a key demand pillar for metals, as well as the potential impact of trade frictions from Donald Trump’s US presidency. Officials have pledged to use greater public borrowing and spending as well as monetary easing to spur growth in 2025.
Investors are “waiting to see if and when Chinese support measures will feed their way into metals markets in the form of stronger demand,” said Ewa Manthey, a commodities strategist at ING, said by email. “Trump’s tariffs could also trigger bigger stimulus from China, capping the downside for copper prices this year.”
Chinese President Xi Jinping acknowledged new challenges from the external environment in a New Year’s Eve speech on Tuesday. Earlier that day, he said China is on track to meet its official growth target of about 5% for 2024 and the economy is “overall stable.”
The LMEX Index of six metals on the London Metal Exchange closed out 2024 with a modest gain of about 4%, as softer Chinese demand was offset by flashes of supply stress on falling inventories and mine supply shortages.
Nickel was 1.6% lower at $15,090 a ton as of 4:48 p.m. local time on the LME, after earlier hitting $15,055 a ton, the lowest level since November 2020. Copper was 0.4% higher at $8,801.50 a ton, having closed out 2024 at a nine-month low.
Read More: Copper holds near 9-month low as 2025 opens with eyes on China
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