Copper prices neared three-week lows on Thursday without new stimulus from a key political meeting in China and investors switching from copper to gold to bet on earlier interest rate cuts by the U.S. Federal Reserve.
Three-month copper on London Metal Exchange (LME) dropped by 1.4% to $9,503.5 a metric ton by 1036 GMT for its lowest since June 28.
“Copper is being hammered. Nothing new is coming out from Beijing,” said Alastair Munro, senior base metals strategist at brokerage Marex.
The Chinese government issued a communique on Thursday after a closed-door meeting of the ruling Communist Party’s central committee members without detailing changes to be implemented at a time of financial hardship.
Lack of policy support towards the Chinese economy that consumes half of the world’s copper could weigh on the metal’s demand prospects.
China’s June imports of copper slipped to a 14-month low.
Copper inventories in LME-registered warehouses, meanwhile, have risen to a 33-month high of 221,100 tons, LME data showed.
Investors switching from copper to precious metals have also affected prices, Munro added, pointing to big trades prompted by a lacklustre economic outlook.
Gold prices hit a record high on Wednesday, helped by prospects for a cut to U.S. interest rates as early as September. Lower rates typically increase the appeal of non-yielding bullion.
In other metals, aluminium touched $2,394 a ton for its lowest since April 3. It was last down 0.5% at $2,379.50.
Tin was the biggest loser on the LME, dropping by 2.4% to $32,165 a ton while zinc lost 1.3% to $2,812 and nickel dipped by 0.3% to $16,500.
(Reporting by Julian Luk in London Editing by David Goodman)
