By Ketki Saxena
Investing.com -- Copper prices in London fell on Wednesday, August 2, 2023, as weak manufacturing data and a struggling property sector in China, the top consumer of the metal, dampened market sentiment.
The metal, used in power and construction, is down 0.9% so far this week as the market awaits clarity on China's measures to boost its economic recovery following the removal of COVID-19 curbs in January.
According to ING analyst Ewa Manthey, "China's post-reopening recovery has not met market expectations and the new data this week offered new evidence that the stimulus measures already introduced in the last couple of months are failing to have a meaningful impact." She added that China is likely to release new stimulus measures soon, but it remains uncertain how these will impact long-term demand for metals.
The Yangshan copper premium, indicating the demand interest to import copper into China, fell to $29 per metric ton, its lowest since May 18.
In addition to the weak Chinese data, a stronger U.S. dollar also weighed on the market. A robust U.S. currency makes dollar-priced commodities less attractive for buyers holding other currencies. This comes after Fitch rating agency downgraded the U.S.'s credit rating on Tuesday.
Total copper inventories in LME-registered warehouses rose to a fresh two-month peak of 75,275 metric tons after an additional 1,200 tons arrived, according to daily LME data.
The premium for cash tin over the three-month contract swung to a discount for the first time since mid-April, indicating easing concerns about metal availability in the LME system. The discount was at $99 per metric ton at the market close on Tuesday compared with a premium of $1,700 on June 21.