Copper prices slipped below $9,000 per ton on the London Metal Exchange (LME), marking their lowest level in two months, as the US dollar continued to strengthen post-election. Futures have dropped around 7% since last Thursday, largely driven by expectations of tighter monetary policy from the Federal Reserve after Donald Trump’s election to the presidency.
The recent dollar surge reflects trader anticipation that Trump’s proposed tariffs and tax cuts could intensify inflationary pressure in the US economy. Inflation risks became more pronounced when a consumer price index report on Wednesday showed its first yearly increase since March.
Copper’s recent decline follows a period of record-high prices in May, as concerns over demand from China, the world’s largest metals consumer, weighed on the market. Although China has signaled economic support, such as infrastructure investments, investors are awaiting more concrete policies to drive commodities demand.
Copper dropped 1.3% to $8,932 per ton on the LME, with other metals following suit; zinc fell 1.8%, and aluminum declined 0.7%. Iron ore futures also fell, dipping 1.2% to $99.40 per ton in Singapore.
Economists are closely watching China’s latest economic indicators, due Friday, which could reveal growth in industrial output and retail sales. These results may determine whether China’s stimulus measures can provide much-needed support for metals markets.