Global benchmark prices of copper declined to a nearly four-month low Friday amid expectations of U.S. Fed increasing interest rates and lowered demand from industries, especially from China and the global technology industry.<\/p>\n
At the time of writing, copper was trading about 1.8% lower than the previous day\u2019s close at $13,461.99 per tonne.<\/p>\n
\u201cThe recent fall in copper prices is mainly due to a stronger U.S. dollar, expectations of higher U.S. interest rates and concerns over weaker industrial demand, particularly from China,\u201d industry body Federation of Indian Mineral Industries (FIMI) told The Hindu.<\/p>\n
Copper prices had gradually eased earlier this month following the results of the mid-term elections which gave a divided government to United States, thus assuaging concerns about tariff threats on refined copper imports \u2013 primarily responsible for the erstwhile rally.<\/p>\n
\u201cProfit booking by investors following the recent price rise and uncertainty over U.S. trade and tariff policies have also contributed to the decline,\u201d the industry body further observed.<\/p>\n
In addition to this, the recent Nvidia fallout has cast added apprehension about future investments in the realm of artificial intelligence and related technologies.<\/p>\n
Further, the possibility of U.S. Fed hiking interest rates could increase the price of the metal \u2013 which is denominated in dollars \u2013 thus, bothering industrial activity and sentiment.<\/p>\n
According to FIMI, copper prices are expected to remain volatile in the short-term.<\/p>\n
\u201cHowever, the long-term outlook remains positive due to rising demand from power infrastructure, renewable energy, electric vehicles and electronics, along with constraints in global mine supply,\u201d it observed.<\/p>\n
It added that lower prices would benefit copper-consuming industries by reducing import costs.<\/p>\n
However, it cautioned a prolonged decline could discourage investments in domestic exploration and mining.<\/p>\n
\u201cWe believe that India should continue to encourage domestic exploration, mining and processing to strengthen its copper supply security and reduce import dependence,\u201d it held.<\/p>\n<\/div>\n