Copper fell to a one-week low on Friday and was heading for a second straight weekly decline, tracking a fall in global financial stocks as signs of credit stress at U.S. regional banks rattled markets.
Benchmark three-month copper on the London Metal Exchange was down 1.7% at $10,466 per metric ton as of 0915 GMT, having earlier dipped as much as 2% to $10,430, its lowest since October 10. The metal hit a 16-month high of $11,000 on Oct. 9.
“It’s a generally risk-averse environment with the most risky assets under pressure,” said Thu Lan Nguyen, head of foreign exchange and commodities research at Commerzbank.
Copper’s losses limited by a weaker dollar, which makes dollar-denominated commodities more affordable for holders of other currencies. But the metal, considered a bellwether for the global economy, was on course to end the week down 0.5%.
Negative sentiment on base metals deepened as financial stocks tumbled on Friday following a rout in U.S. regional banking shares on worries about mounting risks and credit quality. “It’s one additional concern, I would say, as regards the state of the U.S. economy,” Nguyen said.
Investors are also monitoring tensions between the United States and top copper consumer China, which on Thursday accused Washington of stoking panic over Beijing’s rare earth export controls.
Copper stocks in Shanghai Futures Exchange warehouses rose by 550 tons over the past week to stand at 110,240 tons, the highest since April 25.
Most of the LME complex was trading lower on Friday. Aluminium fell 1.4% to $2,748.50 a ton, zinc shed 1.6% to $2,926.50, nickel lost 1.16% to $15,100.00, while tin tumbled 3% to $34,650. Only lead managed to climb, adding 0.3% to $1,970.
(Reporting by Tom Daly; additional reporting by Dylan Duan and Lewis Jackson; Editing by Tasim Zahid)