Copper prices tumbled on Tuesday after reaching a five week high on Monday. Despite falling prices, losses were limited amid further speculation that producers in China will scale back production to counteract falling prices.
On the New York Mercantile Exchange, copper for March delivery lost 1.4 cents (0.64%), trading at $2.126 per pound.
Nine major Chinese copper smelters have agreed to increase their planned production cuts beyond the proposed 350,000 ton-cut if prices and profitability continue to deteriorate in 2016.
On Monday, copper jumped to $2.144, its highest level since November, before ending the day at $2.140. The metal also saw gains on Friday of 3.38% as hopes for production cuts and a weaker dollar helped give a boost to prices.
Copper is set to post a 26% annual decline this year as fears that a slowing economy in China would affect demand. China is the largest consumer of copper in the world, accounting for nearly 45% of the world’s consumption.
Elsewhere, gold traded lower after seeing two days of gains. Gold is up 3%, nearly $30, as investors remain skeptical of further rate increases by the Federal Reserve in 2016.
The dollar index was also down 0.15% to 98.30, falling from last week’s high of 99.33.