FX.co ★ Copper Pulls Back to 1-Month Low

Copper futures in the United States declined to $4.55 per pound on Thursday, hitting a near one-month low due to volatile market dynamics and underperformance compared to other base metals. This decrease is attributed to weakening global demand coupled with an increase in domestic supply. Manufacturing Purchasing Managers' Indexes (PMIs) in China, the United States, and Europe all indicated a contraction in factory activity within major manufacturing regions, thereby dampening the demand outlook for base metals. Concurrently, a significant increase in ore output from South America has contributed to an oversupply situation. The International Copper Study Group has now doubled its surplus forecast for the year to nearly 300,000 tonnes. These growing risks of surplus have prompted Chinese traders to close long positions on U.S. copper futures, which had largely been maintained since the announcement of a U.S. investigation into tariffs on copper imports. This situation aligns with a substantial rise in U.S. copper inventories, as metal is redirected back into the United States, enabling factories to shield themselves from potential tariff risks.