Copper dips on the strong dollar and China's power crisis

September 29, 2021 02:36 PM AEST | By Arpit Verma

Copper dips on the strong dollar and China's power crisis — Image source: Copper bars | Source: © Gana123 | Megapixl.com

Why copper is dipping?

The prices of red metal have been under pressure due to the power restriction issues in China to keep the emission levels on track. China is trying hard to reduce its carbon emissions as a part of the country's goal to attain carbon neutrality by 2060.

Dipping copper prices

Dipping copper prices | Source: © Argus456 | Megapixl.com

At the same time, high energy demand from industries and a shortage of coal supplies have pushed the prices of coal in the country. The country’s industrial sector is struggling due to the ongoing power crunch.

Also Read: What made Copper futures rebound today?

A rise of the US dollar to the highest level in more than five weeks amid rising bond yields has made copper more expensive for other currency holders.

On Monday, copper futures on the London Metal Exchange tumbled below US$9,000 on the concerns of Evergrande's financial crisis that can knock the country's property sector, leading to the subdued demand for copper.

The copper inventories at the Shanghai Future Exchange continued to deplete to reach 12-year low levels. Other metals including tin have also tumbled, losing their Friday’s gain.

Bottom Line

Copper prices tumbled on Tuesday due to the rise in the US dollar and ongoing power crisis in the world’s leading consumer – China.

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