METALS-Copper slips on threat of new U.S. sanctions on China

Kitco Media
By Reuters
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Reuters
(Updates prices, adds U.S. data) By Polina Devitt LONDON, March 2 (Reuters) - Copper prices retreated on Thursday on a firmer dollar and the possibility the United States may impose more sanctions on the world's biggest metals consumer China. Three-month copper on the London Metal Exchange (LME) slumped 1.8% to $8,936 a tonne by 1700 GMT after gaining 1.6% on Wednesday. U.S. officials and other sources told Reuters late on Wednesday the United States was sounding out close allies about the possibility of imposing new sanctions on China if Beijing provides military support to Russia for its war in Ukraine. "The potential for further U.S. sanctions on China sparks the biggest price decline this morning," Al Munro at broker Marex said in a note.


A firmer dollar index , buoyed by data showing a strong U.S. jobs market, added to the pressure. A stronger U.S. currency makes dollar-priced metals more expensive for buyers holding other currencies. "The dollar has been quite strong over the last week and the last month. This is pushing metals down slightly," Dan Smith, head of research at Amalgamated Metal Trading, said. The dollar index gained 2.7% in February to mark its biggest monthly rise since September 2022. Copper has shed 6% since reaching a seven-month high of $9,550.50 in January, pressured by the strong dollar and relatively slow revival of demand in China after it abandoned strict COVID-19 controls. China's annual meeting of the National Party Congress is due to open on Sunday to set economic targets and elect top officials. "The meeting is definitely important. They will be discussing (China's 2026-2030) new five-year plan, so people are looking at it," Smith added. China is becoming increasingly ambitious with its 2023 growth target, aiming as high as 6%, as it builds on its post-pandemic recovery, sources involved in policy discussions told Reuters. LME three-month aluminium fell 1.3% to $2,399.50 a tonne, zinc shed 2.5% to $3,039, lead eased 0.8% to $2,124, nickel lost 2% to $24,400 and tin slid 2.8% to $24,630. For the top stories in metals and other news, click or (Reporting by Polina Devitt Additional reporting by Mai Nguyen in Hanoi and Eric Onstad in London Editing by Barbara Lewis, Elaine Hardcastle)


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