Shanghai copper prices fell on Monday, tracking losses in the London Metal Exchange (LME) market, amid a firmer dollar and a lack of clear demand improvement from the troubled Chinese property sector.
The most-traded June copper contract on the Shanghai Futures Exchange (SHFE) closed down 0.6% to 81,300 yuan ($11,268.35) per metric ton, following an aggregated 0.8% decline on the LME. Chinese markets were closed for a holiday last week.
The dollar index rebounded after hitting a three-week low in the previous session, making greenback-priced metals more expensive for holders of other currencies.
Copper prices have been supported by a potential cut in smelters’ output due to limited mine supply. However, data has not reflected any large cut, and smelters with long-term raw material supply contracts are less likely to reduce production soon.
“The (copper) smelting profit of long-term orders still remains above 1,700 yuan a ton, so the willingness of companies with long-term orders to actively reduce production may be relatively limited,” said Huatai Futures in a report.
Despite the Chinese real estate sector showing no sign of bottoming out, steady demand from the power, electric vehicles, and home appliances sectors contributed to generally good end-user copper demand, according to Huatai analysts.
Other base metals traded on the SHFE also showed mixed performance, with zinc and tin declining, while aluminium, nickel, and lead prices rising.
The lead price jump was attributed to tightness of lead ingots in China, leading to a 2.4% increase in the SHFE lead contract, which hit the highest level since July 2018.