LONDON: Copper prices drifted lower on Thursday as the dollar strengthened and investors reckoned that China’s recent easing of some COVID-19 curbs might not be enough to boost demand.
Three-month copper on the London Metal Exchange dropped 1.9 percent to $8,135 a tonne by 1515 GMT, after dropping 1 percent on Wednesday.
Copper touched near five-month highs on Monday on news that the world’s top metals consumer China had relaxed some COVID-19 restrictions and had moved to shore up the country’s troubled property sector.
Chinese stocks on Thursday, however, closed weaker after a flare-up in domestic COVID-19 cases renewed concerns over more lockdowns.
“We think the market got ahead of itself on the reopening front,” said Geordie Wilkes, head of research at broker Sucden Financial, adding that vaccination rates were relatively low in China.
“That doesn’t really lend itself to an economy that’s fully open ... in the near term we’re expecting prices to correct to the downside.” Also weighing on the market was a stronger dollar index after solid US retail sales data cast doubt on market bets that inflation is cooling and the Federal Reserve might pause its aggressive path of interest rate hikes.
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