Copper Eases from 2-Year High

Copper futures were at $4.3 per pound, easing from the two-year-high of $4.4 touched on April 15th as a strong dollar countered limited supplies.

Further evidence of a resilient US economy deteriorated Fed rate cut expectations, lifting the US dollar used to price copper futures and hampering the purchasing power of key consumers.

Still, sanctions on the sector magnified output disruptions to loosely hold the metal’s rally this quarter.

The US and the UK banned the deliveries of Russian copper to the LME in retaliation to Moscow’s invasion of Ukraine, hammering the supply outlook for the key exchange.

Meanwhile, Chinese copper smelters continued to pursue regulation changes to cut their output by 10% this year, and satellite data noted an increase in offline smelters in March.

Such action would occur as copper ore supply has plunged due to issues in key mines across key mines, pressuring the highly competitive treatment and smelter markets to drop their refining fees to nearly zero.