LONDON: Industrial metals prices fell on Wednesday as further lockdowns in top metals consumer China were seen potentially denting demand, while inventories of copper climbed.
Benchmark three-month copper slipped 0.9% to $10,209 per tonne by 1630 GMT, while zinc shed 1.9% to $4,415 a tonne.
Demand concerns in base metals have been driven by “China’s COVID zero approach as well as the realization that rising costs has to have a growth impact,” said Alastair Munro at brokerage Marex.
China’s COVID-19 pandemic has hit economic activity and triggered government pledges for more monetary support, though an easing in cases has raised hopes the tide is turning.
The International Monetary Fund slashed its forecast for global economic growth, citing the Russia-Ukraine conflict, further dampening demand hopes.
Copper, used in power and construction, is seen as a gauge for the health of the global economy.
Monetary Support: China unexpectedly kept its benchmark lending rates steady on Wednesday, with markets seeing the move as Beijing’s cautious approach to rolling out more easing measures as the economy slows due to COVID-19 lockdowns.
Meanwhile, China’s central bank urged financial institutions to step up support for the contact-intensive service sector and small firms affected by the COVID-19 crisis, it said in a statement on Wednesday.
Aluminium: Global primary aluminium output in March fell 1.55% year on year to 5.693 million tonnes, data from the International Aluminium Institute showed.
Inventories: Copper inventories in LME-approved warehouses rose to their highest since October, up 12,275 tonnes to 128,775 tonnes. Stocks of copper on the LME system have now climbed 60% over the last four weeks.
Supply: Preventing further weakness was the suspension of mines owned by Southern Copper and MMG Ltd due to community protests and clashes.
Other Metals: LME aluminium gained 0.1% to $3,265 a tonne, lead slipped 1% to $2,424, tin was off by 0.2% to $42,995, while nickel fell 0.4% to $33,630.
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