LONDON, March 2 (Reuters) – Copper prices fell on Thursday on the strength of the dollar and the possibility of the United States imposing more sanctions on China, the world’s largest consumer of the metals.
Three-month copper on the London Metal Exchange (LME) fell 1.8% to $8,936 a tonne as of 1700 GMT, after rising 1.6% the previous day.
* U.S. officials and other sources told Reuters on Wednesday that Washington is probing close allies about the possibility of imposing new sanctions on China if Beijing provides military support to Russia in its war in Ukraine.
* “The possibility of the United States imposing new sanctions on China led to the biggest drop in prices this morning,” Al Munro of brokerage Marex said in a note.
* A firmer dollar index, supported by data showing a strong US labor market, added to the pressure. A stronger US currency makes dollar-denominated metals more expensive for buyers holding other currencies.
* Copper has lost 6% since hitting a seven-month high of $9,550.50 in January, under pressure from a strong dollar and a relatively slow recovery in Chinese demand after the end of the strict COVID-19 controls.
* Investors will also watch the annual meeting of the National Congress of the Communist Party of China, which opens on Sunday to set economic targets and elect top economic officials. “The meeting is certainly important. China’s new five-year plan (2026-2030) will be discussed there, so people are watching,” Smith added.
* In other base metals, three-month aluminum on the LME fell 1.3% to $2,399.50 a tonne; zinc fell 2.5% to $3,039; lead fell 0.8% to $2,124; nickel fell 2% to $24,400; and tin fell 2.8% to $24,630.
* To view base metal futures prices:
– COPPER
– LEAD
– TIN
– NICKEL
– ALUMINUM
– ZINC