Despite a weaker dollar, base metal prices have fallen due to China’s sluggish economic data, causing concerns about demand.
We can see how this has affected copper’s price on the London Metal Exchange which is now down to $3.82.
Other metals like aluminum, nickel, and lead have all seen a similar decrease in price because of this news.
Data about China’s economy shows slow growth in the second quarter as both domestic and international demand has weakened.
This has led to increased pressure on policymakers to provide additional stimulus and support economic activity amidst the rapid decline in post-COVID momentum.
In addition to the demand concerns, there was a rise in the production of industrial metals.
Last month, China’s output of non-ferrous metals, including aluminum, continued to increase compared to the previous year.
This surge in supply, combined with weak demand, resulted in expectations of accumulating inventories in the market.
We will see how this data out of China continues to affects the market in the weeks to come!