FX.co ★ Copper Falls on Soft China Demand

Copper futures declined by approximately 1% to trade below $4.85 per pound on Tuesday, erasing gains recorded in the previous session. This downturn was primarily driven by subdued industrial demand from China, the largest consumer, which has affected import levels. Recent statistics also highlight ongoing deflationary pressure within China's economy, coupled with weaker-than-anticipated export growth due to the persistent trade conflict with the United States. Investors are keenly observing the trade discussions taking place between US and Chinese officials in London. These talks, which commenced on Monday, are focused on rare earth shipments and the potential relaxation of export restrictions, with further negotiations slated for Tuesday. Despite this short-term price decline, copper inventories at the London Metal Exchange are consistently decreasing, signaling robust demand from global manufacturing centers. Nevertheless, experts caution that the high price levels might begin to deter consumption, potentially leading to an imminent market correction.