Prices for copper fell -0.23%, ending the day at 712.25. This decline was caused by a number of causes, including the Federal Reserve’s cautious approach, anxieties about a probable government shutdown in the United States, and worry about decreased industrial demand as a result of a slowing Chinese economy.
A stronger dollar and rising bond yields further diminished copper’s appeal. The Federal Reserve has signaled a protracted period of high interest rates by indicating the likelihood of one additional interest rate hike in 2023 and a more gradual unwinding of monetary policy in 2024.
The ongoing government budget talks, which have an October 1st deadline, have also increased tensions. The large developer Evergrande skipped a payment, which caused more problems for the Chinese real estate market.
Although Commerzbank acknowledged heightened negative risks to its year-end copper price projection, which was previously set at $8,800 per ton, it noted some improvements in the outlook for copper supply. Positively, Grupo Mexico-owned Southern Copper expects Peru’s copper production to climb by 17% this year to 400,000 metric tons, helping the company’s overall output grow.
