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Copper prices fall on stronger dollar and inventory outlook

The copper price fell on Wednesday as traders downplayed Chinese plans to increase strategic reserves. This was due to a stronger dollar, and a rise in metal availability at the?exchange. Benchmark three-month Copper on the London Metal Exchange fell 3% to $13,065.50 per metric tonne by 1700 GMT. It was just above the 21 day moving average which provides technical support at $13,048. Since speculators began buying gold and silver in greater quantities, copper has dropped 10%. This is despite analysts warnings about weak demand, increasing stockpiles, and the possibility of higher supplies.

Anant Jatia, an investment manager who specialises in commodity arbitrage, said: "You are seeing volatility in precious-metals spill over to copper, but not at the same level."

According to him, the precious metals market has become more speculative and operates in a tight liquidity environment that poses risks for both long-term and short-term positions.

Cash is king in this type of volatility. He added that liquidity was the only way to ensure you could defend your position, for both hedgers and speculators, on both the base and precious metals market. Traders and analysts in the world's largest metals consumer,?China cautioned traders against misinterpreting remarks by an official of the state-backed China Nonferrous Metals Industry Association regarding?plans for China to increase its strategic copper reserves.

The LME registered warehouses' available stocks rose to 155.725 tons - their highest level since March - after 12.750 tons of copper were returned on warrant in Taiwan and South Korea. Nickel?fell by 0.6%, to $17.340 per ton, in other LME metals. Goldman Sachs & Macquarie raised their average nickel price forecasts for 2026 above $17,000, citing tighter supplies from Indonesia's top producer. Aluminium dropped 1.5% to $3.058.50 per ton. Zinc fell 0.6% to $3.317. Lead rose 0.1% at $1.965.50. Tin declined 3.9% to $48,160. (Reporting and editing by David Goodman, Emelia Sithole Matarise and Lewis Jackson; Additional reporting and editing by Dylan Duan and Lewis Jackson)

(source: Reuters)