Copper Dove in July 22 Due to a Stronger Dollar


Dec. 4 2020, Updated 10:52 a.m. ET

Copper dives lower

After startingJuly 22 on a weaker note, copper fell as the day progressed because of the stronger dollar. At 1:00 PM EDT on July 22, the COMEX copper futures contract for September delivery was trading at ~$2.24 per pound, a decline of ~1.0%.

Article continues below advertisement

Chinese data and stronger dollar

Considering the fact that China is the biggest consumer of copper, the country’s economic data will have its influence on copper price trends. According to the data released by National Bureau of Statistics, China’s production of copper in the first six months of this year increased by 7.6% compared to same period of the previous year.

Considering the global glut situation and weaker signals of demand growth, increase in China’s copper production instead a decline weakened the sentiment in the market.

ICSG reported deficit in copper market

According to the ICSG, global primary and secondary refined copper production increased to ~7.7 million tons in the first four months of 2016. This is a 4.5% increase when compared to total refined copper output from January to April 2015, which was ~7.4 million tons.

On the other hand, for the same period in 2016, consumption rose by 6% and reached ~7.8 million tons, resulting in a deficit of ~119,000 tons, according to the ICSG.

On July 22, the stronger dollar weighed on copper prices as the stronger dollar weakened dollar-denominated commodities like copper. The better-than-expected US manufacturing PMI data supported the dollar to move higher on July 22.

At 1:15 PM EDT on July 22, major copper producers Freeport-McMoRan (FCX), Billiton (BHP), and Rio Tinto (RIO) fell by ~1.7%, ~1.7%, and ~1.19%, respectively. Glencore (GLNCY) gained ~0.95%.

The SPDR S&P Metals & Mining ETF (XME) gained ~0.48% whereas the PowerShares DB Base Metals ETF (DBB) declined by ~0.36%.


Latest Rio Tinto PLC News and Updates

    Market Realist Logo

    © Copyright 2022 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.