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Highlights
- Copper dips on Wednesday due to the ongoing power crisis in China.
- China’s ongoing power crisis is expected to affect the global supply and demand.
- A rise in the US dollar has also weighted copper prices as a higher US dollar makes copper more expensive for other currency holders.
Copper prices tumbled on the second consecutive day on Wednesday due to the rise in the US dollar and the power supply crisis in China, shutting factories. December delivery copper futures traded 0.20% up at US$4.19 per pound on Thursday as of 11:42 AM AEST.
Copper traded at US$9,189.50 per tonnes, down 0.9% on the London Metal Exchange on Wednesday after falling nearly 1% on Tuesday. Copper hits the record high level of US$10,747.50 per tonne in May 2021. The prices of industrial metal have grown as much as 20% in 2021.
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China is the biggest consumer of metals in the world and the country is unclear that how the ongoing power crisis will affect the global supply and demand.
China’s power crisis
The ongoing power crisis in China is a result of the country's move to reduce its carbon emissions by limiting the utilisation of coal. A maximum portion of electricity in the country comes through coal-fed power plants and the utilisation of coal creates a lot of pollution.
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As a part of the country's long-term goal to attain carbon neutrality by 2060, China wanted to put a cap on coal usage in industries and for power generation as well.
Additionally, a rise in the US dollar, hitting highs of one year has also weighted copper prices as a higher US dollar makes copper more expensive for other currency holders.
Also Read: Copper prices hit more than one-month high on strong demand
Bottom Line
Copper prices tumbled on the second consecutive day on Wednesday due to the rise in the US dollar and power supply crisis in China.
