Copper and other industrial metals closed lower in the session this Tuesday (30), on a day of strong dollar and risk aversion before the Federal Reserve’s (Fed, the US central bank) decision tomorrow. The prospect that inflation and the strength of the US job market – reinforced today by employment cost data – will require restrictive interest rates for longer weighs on sentiment.
Copper for July closed down 2.02%, at US$4.5645 a pound, on Comex, the metals division of the New York Mercantile Exchange (Nymex). On the London Metal Exchange (LME), three-month copper fell 1.93% at around 2:20 pm (Brasília time), at US$ 9,966.00 per ton.
Caution, which already set the tone for negotiations early on, prevailed after the US employment cost index rose 1.2% in the first quarter, above the forecast for an increase of 0.9%. The data adds to a series of other strong economic indicators in the US that have been used as an argument by those who fear monetary relaxation too soon.
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The metals market was still digesting Glencore’s production report for the first quarter of 2024. The mining company reported a slight drop in annual copper and coal production, however, it maintained its projection for total production of these commodities in 2024. Nickel grew and of zinc remained practically stable.
Commerzbank assesses that the upside potential of base metals has practically been exhausted, as the prospect of tightening supply appears already sufficiently priced in. “As we do not expect a strong global economic recovery, we are also cautious about expecting a strong increase in demand as in previous recoveries”, adds the bank in a report today. “This is particularly true for metals, which are heavily dependent on the construction sector. In our opinion, the problems in China’s property market are also unlikely to be resolved this year.”
Among other metals traded on the LME, at the time above, a ton of aluminum was down 0.27%, at US$2,581.00; lead fell 0.61%, to US$ 2,214.00; nickel rose 0.08%, to US$ 19,220.00; tin fell 4.48%, to US$31,165.00; and zinc dropped 1.93%, to US$ 2,895.00.
