On Tuesday, June 4th, metal prices on the London Metal Exchange (LME) mostly fell, with copper futures falling below the psychological threshold of $10000 per ton.
The specific market situation shows that LME copper and LME nickel both fell by more than 2%, closing at $9935.00 and $18888.00 per ton, respectively; LME zinc fell 0.44% to $2930.00 per ton; LME aluminum rose slightly by 0.17% to $2666.00 per ton.
For LME copper, this is the first time it has closed below the $10000 mark since May 10th. At the same time, copper in Shanghai fell 1.34%, and the trading price of New York copper futures also fell by over 2.6%. The US copper sector has also experienced a sharp decline, with McMoran copper and gold now falling more than 5% and Ivanhoe Electric falling more than 11%.
Analysis suggests that traders are weighing the impact of a significant increase in global inventories and the weak job vacancy data in the United States.
In the early morning session of the US stock market, the Job Vacancies and Labor Mobility Survey (JOLTS) released by the US Bureau of Labor Statistics showed that the number of job vacancies recorded at the end of April 2024 was 8.059 million, a new low since March 2021, significantly lower than the market expectation of 8.37 million. The March data was revised down from 8.488 million to 8.355 million.
Recent data indicates that the labor market in the United States is cooling down, and these data do strengthen the Federal Reserve's bet on starting interest rate cuts within the year, which may boost copper prices. On the other hand, this reflects that the US economy is cooling down, and demand for industrial metals such as copper may slow down in the near future.
Data shows that copper inventories in Shanghai have climbed to the highest level since 2020, and Asian warehouses tracked by London have also seen a steady stream of small inflows in the past few weeks. Generally speaking, inventory is expected to decline at this time of year, which also suppresses the sustained decline in copper prices from a record high of $11100.
"The supply in the copper market seems to be much more abundant than some traders expected," wrote Carsten Menke, a senior executive at Julius Baer in Switzerland, in an email. "Therefore, in our view, copper prices are unlikely to turn rapidly, and we would rather expect the market to consolidate in the summer months."
Last week, the Indonesian government promised to extend the copper concentrate export license for copper miners such as PT Freeport Indonesia until December 31st, which was originally scheduled to expire on May 31st. The latest news shows that Indonesia plans to impose a 7.5% export tax on copper concentrate.
It is understood that the Indonesian Free Port Company is still waiting for notification of the export license. Vice CEO Jenpino Ngabidi stated that if the extension of the export license is approved, the company's copper concentrate production target for this year will increase from the initial 2.84 million tons to 3.78 million tons.