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    China Demand Concerns Offset by Supply Disruptions

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    Copper prices experienced a downturn on Monday due to apprehensions surrounding weak demand in China, the world’s leading consumer of the metal. However, the decline was mitigated by disruptions in mining operations and closures that raised concerns about potential supply constraints. In official rings on the London Metal Exchange (LME), benchmark copper traded 0.4% lower at $8,516 per metric ton. Despite this dip, copper prices reached four-month highs at $8,640 per ton earlier this month. Persistent challenges in China’s property market have impacted industrial metals demand throughout the year, although government interventions aimed at supporting the sector have been implemented. Analysts, such as Carsten Menke from Julius Baer, anticipate that the demand for copper in the energy transition will counterbalance the slowdown in China.

    The sentiment in the copper market was further influenced by Anglo-American’s announcement of cuts to its copper production guidance. The company reduced its projections by 20% for the next year and 18% for 2025. This development, coupled with expectations of a potential cut in US interest rates by the Federal Reserve in the first quarter of next year, impacted the dollar. The dollar’s proximity to 4-1/2-month lows against a basket of major currencies could be favorable for metal prices, as a weaker US currency makes dollar-priced metals more affordable for holders of other currencies, potentially boosting demand.

    On a different note, aluminum prices faced a decline following data that revealed a significant increase in stocks in LME-approved warehouses. The stocks surged by 59,850 tons to 504,475 tons, reaching the highest level since early October. Despite this setback, funds cutting short positions helped aluminum prices rebound toward the previous Friday’s five-week high of $2,269.50. Three-month aluminum witnessed a 0.6% increase, reaching $2,261 per ton.

    In the broader spectrum of metals, zinc experienced a 0.5% gain, reaching $2,545, while lead advanced by 0.4% to $2,090. Tin, on the other hand, saw a 0.6% decline, settling at $25,025, and nickel faced a 1.6% drop, reaching $16,875.

    Investors are closely monitoring the interplay of demand concerns in China, disruptions in supply chains, and global economic factors to navigate the complex dynamics of the metals market.

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