Copper futures in the US fell below $5.40 per pound in March, their lowest level in three months, tracking a broader decline in key industrial metals amid a stronger US dollar and mounting concern that elevated energy costs will erode manufacturing demand. Major crude oil and LNG benchmarks have largely held on to this month’s sharp gains after conflict in the Persian Gulf destroyed energy infrastructure and halted tanker-based exports.
These developments have darkened the manufacturing outlook by squeezing factory margins and curbing consumers’ purchasing power. At the same time, heightened upside risks to inflation prompted Federal Reserve policymakers to adopt a more hawkish tone in their economic projections, bolstering the dollar and putting additional pressure on commodities priced in the greenback.
The decline in copper prices also coincided with six-year-high inventories on the London Metal Exchange (LME) and record stockpiles on the Shanghai Futures Exchange (SHFE), reinforcing lower bidding levels in the market.
