Copper price falls as China vows to release more metal reserves
The copper price fell on Thursday after China’s state planner said a briefing that it will closely monitor market conditions and continue to release copper, aluminum and zinc from its state reserves, in an effort to overcome mismatches between supply and demand.
“Currently, copper, aluminum, and zinc prices are still high,” said Li Hui, an official from the National Development and Reform Commission, adding that the authority will guide prices back to reasonable levels.
China has released 420,000 tonnes of the metals in three batches so far this year via public auctions at prices “slightly lower than market” and had helped fabricators, Li said.
Copper for delivery in December fell 2.6% from Wednesday’s settlement price, touching $4.290 per pound ($9,438 per tonne) midday Thursday on the Comex market in New York.
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The market is also awaiting next week’s US Federal Reserve meeting for news on the expected tapering of stimulus.
“The tapering expectations are a key focus and next week is the FOMC meeting, which is important to watch as the macro drivers are dominating copper prices,” said Xiao Fu, head of commodity market strategy at Bank of China International in London.
Prices for copper, which hit a record high of $10,747.50 in May, are likely to be rangebound until the FOMC meeting, she said.
“If the Fed begins its monetary easing in November-December, copper would face pressure but is likely to remain resilient thanks to supportive fundamentals.”
(With files from Reuters)