BEIJING: Copper prices struggled to find momentum on Monday as global supply worries countered demand uncertainty stemming from growth slowdown worries and China’s stance on COVID-19 curbs.
Three-month copper on the London Metal Exchange gained as much as 0.7% during the session but soon gave up gains to trade at $7,538.50 a tonne by 0416 GMT.
The most-traded November copper contract on the Shanghai Futures Exchange held at 62,910 yuan a tonne.
Stocks at warehouses of LME, COMEX, ShFE and Shanghai-bonded warehouses totalled 253,000 tonnes last week, a weekly drop of 12,000 tonnes, according to a report by CITIC Futures.
Total copper production in Chile, the world’s top copper producer, fell 10.2% in August to 415,500 tonnes.
Tight supplies, better demand in China, and an open import arbitrage buoyed the Yangshan import copper premium to $142.50 a tonne on Friday, the highest since March 2014. But, uncertainty around demand prevailed as the world’s top metal consumer China’s zero-COVID policy persisted.
Copper prices slid on firmer dollar, China’s COVID flare-ups
Chinese President Xi Jinping reiterated the country’s COVID-19 stance when he kicked off a Communist Party Congress on Sunday, against market expectations of an easing in such curbs.
Imminent changes in the current COVID-19 policy is not expected, UBS Investment Bank Research said in a note, adding that it expected restrictions to be eased significantly after the National People’s Congress in March 2023.
Stocks in China and Hong Kong also slid. Meanwhile, recession fears amid global central banks’ aggressive monetary policy also dented copper’s rally. Copper is often used as an economic indicator.
Among other metals, ShFE aluminium slid 1% at 18,420 yuan a tonne, nickel fell 0.8% to 180,780 yuan a tonne, while zinc was down 0.4% to 24,535 yuan a tonne.
LME aluminium lost 0.8% to $2,288 a tonne, zinc declined 0.9% to $2,915 a tonne, and lead slid 0.6% to $2,028.50 a tonne.
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