The LME three-month copper contract traded at $6,460 per tonne as of 03:30 BST, down $33 from Monday’s close, with around 300 lots of the contract changing hands so far.
With Chinese markets, including the Shanghai Futures Exchange, closed for the country’s National Day Golden Week holiday (October 2-6), trading has been quiet.
“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,” William Adams, senior analyst at Metal Bulletin, said.
“We would not be surprised if prices remain under pressure for a while longer or at least remain choppy. The stronger dollar is also no doubt acting as a headwind,” he added.
The LME copper price has eased since hitting as high as $6,970 per tonne on September 5, this was the highest since September 2014.
Throughout September, copper prices erased August’s rally due to a surge in LME stocks, a stronger dollar and meddling Chinese data. Additionally, Hurricanes Irma and Maria devastated the US city of Houston and the Caribbean, affecting short-term demand for commodities, INTL FCStone analyst Edward Meir said in a research note recently.
Copper prices are expected to maintain the current range and trade between $6,365-6,770 per tonne in October amid easing geopolitical tensions and calmer market conditions, Meir forecast.
The dollar, already seeing support from expectations of a US interest rate rise in December, rose further following the release of strong US economic data on Monday. The country’s ISM manufacturing purchasing managers’ index (PMI) for September was at 60.8, higher than both the expected reading of 57.9 and August’s print of 58.8.
The USA’s final manufacturing PMI for September was close to expectations at 53.1, while August construction spending rose 0.5% month on month, also largely in line with expectations. ISM manufacturing prices for September came in at 71.5, higher than the forecast reading of 64.5.
Base metals prices
Currency moves and data releases