Copper Futures Price Decline: Copper futures saw a decline in September, falling towards the $3.6 per pound mark. This marked the lowest price level since late May.
Influence of Strong Dollar and Weak Industrial Sentiment: The decline in copper futures was attributed to renewed pressure from a strong US dollar and weak industrial sentiment globally. A strong dollar can make commodities like copper more expensive for foreign buyers, potentially reducing demand.
Concerns About China's Property Developers: Persistent concerns about the financial health of property developers in China contributed to worries about the country's macroeconomic situation. This uncertainty had an impact on copper prices, as China is a major consumer of copper.
Hawkish Federal Reserve and European Growth Concerns: The outlook of a hawkish Federal Reserve and growing concerns about economic growth in Europe were mentioned as factors continuing to pressure industrial activity. This was reflected in months of contractionary manufacturing Purchasing Managers' Index (PMI) data.
Copper Supply-Demand Dynamics: Copper futures were supported by concerns of large incoming copper deficits. The demand for copper, particularly in the context of electrification needs, was outpacing current production levels. This supply-demand imbalance was contributing to copper's resilience in the face of other negative factors.
Declining Copper Production in Chile: Output from Chilean state-owned copper company Codelco decreased significantly, with a 14% decline in the first half of the year. This decline followed a 7% decrease from the previous year (2022).
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