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Copper price heads for biggest weekly fall in three months

Copper prices headed towards their biggest weekly decline since October on Friday as the prospect of central bank tightening reduced investor appetite for risky assets, hammering equities and boosting the dollar.

Europe’s main bourses fell again and Chinese equities slumped to 16-month closing lows while the dollar was at its strongest against a basket of major rivals since June 2020, making metals costlier for non-U.S. buyers. 

March delivery contracts were exchanging hands for $4.31 a pound ($9,482 a tonne) on the Comex market in New York, down 2.5% compared to Thursday’s closing.

Benchmark copper on the London Metal Exchange (LME) was down 1.9% at $9,598 a tonne by 1201 GMT and down by about 3.5% this week.

Mining stocks also slid, with Freeport-McMoRan down 12.9% from the previous week, First Quantum Minerals down 12.6%, and Ivanhoe Mines down 10.8%.

“Price weakness could last through China’s New Year public holiday next week, typically a time of low demand,” said Saxo Bank analyst Ole Hansen.

“However, the longer-term outlook remains positive, with a global transition from fossil fuels to copper-intensive electrification likely to boost demand.”

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UBS analysts said they still expect industrial metals prices to rise by 10–15% this year.

“We expect almost all metal markets to be undersupplied,” they said.

(With files from Reuters)

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