Comex copper prices started the first trading day of October in negative territory with a stronger dollar keeping the red metal suppressed.
Copper for December settlement on the Comex division of the New York Mercantile Exchange dipped 0.60 cents or 0.2% to $2.9490 per lb.
“We remain bullish for copper’s fundamentals but prices had started to look overstretched recently so some profit-taking seemed probable, which is now unfolding,” Metal Bulletin senior analyst William Adams said.
“The stronger dollar is also no doubt acting as a headwind,” he added.
Meanwhile, China is already enforcing some restrictions on copper imports, cutting quotas and limiting the number of licences in some regions of the country, sources told Metal Bulletin, although a full ban on scrap copper imports has not yet been confirmed.
Chile’s Escondida copper mine reported a 91% year-on-year decline in net profit for the first half of 2017, which it attributed largely to a 44-day strike at the operation in this year’s first quarter, the company said on September 28.
In the precious metals space, Comex gold for December delivery fell $5.60 or 0.4% to $1,279.20 per oz.
Currency moves and data releases
- The dollar index was up 0.42% to 93.46. It has eased slightly after reaching as high as 93.67 on September 28, the highest since August 18.
- In other commodities, the Texas light sweet crude oil spot price fell 2.67% to $50.30 per barrel.
- China’s central bank said on Saturday that it would cut the reserve requirement ratio –which is the amount of cash that some banks must hold as reserves – for the first time since February 2016 to encourage lending to small business and the agricultural sector.
- In data released on Saturday, China’s official manufacturing purchasing managers’ index (PMI) for September came in at 52.4, above forecast of 51.5 and August’s reading of 51.7 – the September print was the highest since April 2012.
- “With news that some parts of heavier-polluting Chinese industry will be curtailed from this month…the official Manufacturing PMI – and the non-manufacturing PMI for that matter – released over the weekend revealed no such net impact,” National Australia Bank said on Monday.
- Economic data due later today includes final manufacturing PMI, ISM manufacturing PMI, construction spending, ISM manufacturing prices from the USA and manufacturing PMI from the UK.