Copper declines as Chinese inventories spike

Copper prices fell on Monday as the dollar gained ground ahead of major economic data, while copper inventores surged in China, the world’s largest metals consumer.

Copper three-month futures at the London Metals Exchange fell 0.5% to $8529 a tonne, while copper March futures fell 0.4% at the Shanghai Futures exchange to 68990 yuan a tonne. 

The dollar was up on Monday ahead of a week filled with important data, with industrial metals hurting usually from the stronger dollar as they become costlier to holders of non-dollar currencies.

Investors are now focused on important inflation data from the US, Japan, and Europe to gauge the likely path ahead for monetary policies. 

Earlier data showed copper inventories rose in China, hurting prices, as January production rose past estimates, while demand tapered off.

Copper inventories at SHFE CU-STX-SGH rose to 181,323 tonnes following the Chinese new year holiday, hitting a year high.

However, demand didn’t rise after the holiday, in turn weakening prices. 

Friday data also showed new home prices in China continued to decline in January despite government measures to restore confidence in the real estate sector. 

Aluminum prices rose 0.3% at the London Metals Exchange to $2186 a tonne, while nickel lost 1.3% to $17,265, while zinc rose 0.3% to $2412, as lead lost 0.4% to $2087, while tin lost 0.5% to $26,225 a tonne. 

Otherwise, the dollar index fell 0.1% as of 17:10 GMT to 103.7, with a session-high at 104.02, and a low at 103.7. 

In American trade, copper futures due in May fell 1.5% to $3.84 a pound as of 17:04 GMT.