Copper prices experienced a decline in Asian trading sessions, influenced by a combination of factors including a firmer US dollar and indications of weakening demand. These elements have collectively dampened market sentiment for the industrial metal.
Analysts at ANZ noted a deceleration in economic activity within China leading up to the Lunar New Year. This period is characteristically marked by inventory accumulation, and the recent surge in base metal prices has prompted a cautious approach from downstream consumers, reducing their purchasing activity.
Further pressure on copper prices arose from regulatory adjustments on the Shanghai Futures Exchange. Officials increased margin requirements for both aluminium and copper, raising them from 10 per cent to 11 per cent. This adjustment is intended to curb speculative trading, contributing to the overall downward pressure on prices.
