Global Times reported that Chinese copper futures lost more ground last week as political tensions abroad continued to undermine the economically sensitive commodity.

 

The most traded copper contract on the Shanghai Futures Exchange for July delivery fell 0.85% to finish the week down 1.44% at CNY 54,830. The contract lost 5.24% in the Q1.

 

The benchmark 3 month copper contract on the London Metal Exchange fell nearly 1.8% to finish Thursday at USD 7,533 per tonne. The LME was closed Friday for the Easter holiday. The LME contract lost almost 5% in the Q1 of this year, following a 3% drop in the Q4 of 2012.

 

Political problems in the EU, including an ongoing deadlock in the Italian government, put pressure on the euro. The US dollar strengthened last week on the back of the weakening euro. The US Dollar Index, which weighs the dollar against a basket of other currencies, rose 0.76% last week. A stronger dollar can hurt demand for commodities by making them more expensive for holders of other currencies.

 

Ms Natalie Rampono commodity strategist for the Australian bank ANZ said that other factors have been pushing down copper prices as well, including an unprecedented increase in copper stockpiles at exchange-tracked warehouses.

 

She said that "We believe recent stock increases are not currently a good signal for underlying demand. Instead, we expect seasonal demand in China in the second quarter to be a catalyst for a near-term recovery in prices."