Market Outlook: Copper Set for Second Consecutive Monthly Decline Amid Demand Concerns

Copper prices rose in today's trading, but are set to face their second monthly decline amidst concerns about possible U.S. tariffs and a lack of aggressive stimulus from China. On the London Metal Exchange (LME), three-month copper futures increased by 0.5% to $9,049 per ton at 07:30 GMT, while the January copper contract on the Shanghai Futures Exchange (SHFE) remained steady at 73,870 yuan per ton ($10,215.74).

The weakening U.S. dollar has made dollar-denominated metals cheaper for holders of other currencies. However, both contracts are trending toward a second consecutive month of losses due to concerns that President-elect Donald Trump will impose more tariffs on imports, which could particularly hurt economic growth and metal consumption in China.

Moreover, the stimulus measures undertaken by Beijing so far have been less than expected and have not targeted sectors that directly consume metals. Analysts noted that Trump's election, the resulting strengthening of the dollar, and the lack of impact from China's stimulus on economic data are the primary reasons for the decline in metal prices this month.

However, LME copper prices found support from strong Chinese demand at a significant resistance level around $9,000 per ton. The contract has fallen nearly 20% from its historic peak of $11,104.50 per ton reached in May.