Since May 10, LME Copper has closed below the $10,000 mark for the first time. Shanghai copper fell by 1.34%, and the price of New York copper futures currently being traded fell by over 2.6%. Analysts say traders are weighing the impact of a significant increase in global inventories, as well as weak job vacancy data in the United States.
On Tuesday, June 4, London Metal Exchange (LME) metal prices mostly fell, with copper futures prices falling below the psychological level of $10,000 per ton.
Specifically, LME copper and LME nickel both fell more than 2%, closing at $9,935.00 and $18,888.00 per ton respectively. LME zinc fell 0.44%, to $2,930.00 per ton, while LME aluminum rose slightly by 0.17%, to $2,666.00 per ton.
For LME copper, this is the first time it has closed below $10,000 since May 10th. Meanwhile, copper traded in Shanghai fell 1.34%, while the futures prices for copper traded in New York also fell more than 2.6%. The copper sector of the US stock market also saw a major downturn, with Freeport-McMoRan dropping more than 5% and Ivanhoe Electric falling more than 11%.
Analysts say traders are weighing the impact of a significant increase in global inventories and weak job vacancy data in the United States.
In early US trading, the US Bureau of Labor Statistics released the results of the Job Openings and Labor Turnover Survey (JOLTS) for the end of April 2024, showing a record low of 8.059 million job vacancies, significantly lower than the market's expected 8.37 million. The March figure was revised down from 8.488 million to 8.355 million.
Recent data shows that the US labor market is cooling, and these data indeed strengthen bets that the Federal Reserve may cut interest rates later this year, which may be bullish for copper prices. However, on the other hand, this reflects that the US economy is cooling, and demand for industrial metals like copper may slow down in the near future.
Data shows that copper inventories in Shanghai have climbed to their highest level since 2020, and Asian warehouses tracked by London have seen a steady stream of small inflows in recent weeks. Normally, inventories should decline at this time of year, and this abnormal situation has also weighed on copper prices, which have continued to fall from the record high of $11,100.
Carsten Menke, a senior executive at Julius Baer Bank in Switzerland, wrote in an email, "The supply of the copper market seems to be much more abundant than some traders expected. Therefore, in our view, copper prices are unlikely to turn quickly, and we prefer to expect the market to consolidate in the summer months."
Last week, the Indonesian government promised to extend copper concentrate export licenses for companies such as PT Freeport Indonesia until December 31, which was originally scheduled to expire on May 31. The latest news shows that Indonesia plans to impose a 7.5% export tax on copper concentrate.
It is reported that PT Freeport Indonesia is still waiting for notification of the export license extension. Vice President Jenpino Ngabdi said that if the extension of the export license is approved, the company's copper concentrate production target for this year will be raised from the original 2.84 million tons to 3.78 million tons.