Copper Prices Reach Three Week Low With No End In Sight
On Wednesday copper contracts for December fell to a near three week low of $3.1300. The price was affected by both concerns about China’s credit supply and the strengthening dollar.
On Tuesday Chinese Premier Li Keqiang said that the country’s money supply grew by just 12.8% in August, less than July’s 13.5% and below the predicted 13.4%. This weak data caused concerns about a slowdown in growth of the world’s largest consumer of copper.
Furthermore, data released on September 8th showed that China’s copper imports fell by 12% from August last year as the result of a government investigation into metal financing at Chinese ports.
China accounts for almost 40% of global copper demand and as such is the biggest consumer of the metal. Additionally, a strong US dollar reduces the appeal of copper as an alternative asset and generally makes dollar priced commodities more expensive for those that hold other currencies.