Copper futures fell on Thursday (March 19) to their lowest level in multiple months, reflecting a combination of macro-economic pressure and demand concerns. 

A more cautious stance from the Federal Reserve has pushed US Treasury yields to multi-month highs, weighing on sentiment. Escalating tensions in the Middle East have driven energy prices higher, raising concerns about persistent inflation and a potential drag on global growth, weighing on copper, said Tony Sage, the CEO of Critical Metals.

At the same time, inventories tracked by the London Metal Exchange have surged to over 334,000 tonnes, the highest level in more than six years, signalling ample availability. The build-up, including in China, could continue to weigh on the market, he stated.

In addition, China, the world’s largest copper consumer, presents a mixed picture. While industrial production and infrastructure investment have shown resilience, domestic demand remains subdued. 

Higher energy costs linked to geopolitical tensions may further constrain activity, said Sage.

Looking ahead, the short-term outlook remains uncertain amid growing inventories and as higher oil prices could weigh on economic growth. However, over the long term, demand linked to AI data centers, electrification and the energy transition could continue to support the outlook for the market, he added.-TradeArabia News Service