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Copper and other major base metals took a dive on both the Shanghai Futures Exchange and the London Metal Exchange, pressured by a stronger US dollar and delayed jobs data that rattled the commodities markets.
What does this mean?
When the US dollar gains ground, metals priced in dollars become more expensive for buyers using other currencies, leading to weaker demand. With Federal Reserve officials still undecided on possibly cutting interest rates in December, expectations have cooled and the dollar has gained momentum. That's knocked copper and its peers -- including nickel, which hit its lowest mark since July 2022 -- along with aluminium, zinc, lead, and tin. The delayed US jobs report, a key piece for central bank decision-making, has only increased the sense of uncertainty. Investors are now especially sensitive to labor market signals, and nickel's drop reflects not only waning demand but also rising inventories on both the LME and SHFE.
A firmer US dollar makes metals less attractive for buyers and investors outside the US, cooling demand and prices across the board. This sell-off has hit not only copper, but also aluminium, zinc, tin, lead, and especially nickel -- recently dropping to its lowest point in more than two years. With delayed jobs data and mixed signals from the Fed, expect more volatility ahead for metals markets.
The bigger picture: Global growth in the balance.
Base metals drive construction, tech, and clean energy around the world. Their collective decline is a red flag for global demand and shows traders are bracing for potential economic shifts, especially as central banks reassess their next steps. With key economic data lagging and policy direction unclear, businesses and governments are hunkering down, watching for signs of a changing cycle.