LONDON: Copper prices extended their decline to a third straight day on Friday as a spike in Covid -19 cases in top metals consumer China and hawkish comments by Fed officials stoked demand concerns.
Three-month copper on the London Metal Exchange had slipped 0.4% to $8,074 a tonne by 1700 GMT.
It has lost about 5% so far this week, retreating from a five-month high last Friday.
US Comex copper futures dropped 9% to $3.66 a lb.
Copper touched those highs partly on news that China had relaxed some Covid restrictions. But cases have continued to climb this week, including in big cities such as Beijing and Guangzhou, fanning fears about China’s economic performance.
“China announced some easing at the margins of their Covid policy.
But the fact is, they’re heading into winter and infection rates are surging, so I can’t see these controls ending any time soon,” said Tom Price, head of commodities strategy at Liberum.
Signs that supply was rising also weighed down copper prices, with inventories in SHFE warehouses climbing 12.7% this past week to 85,817 tonnes, data showed on Friday.
“Orders from buyers have remained moderate since September.
The current sentiment is weak as it’s hard to find any bright spot of demand next year,” a Chinese copper tube producer said.
A steady drum beat of hawkish statements from Federal Reserve officials continued on Friday as Susan Collins warned that the Fed may need to deliver another 75-basis point rate hike as it seeks to get inflation under control.
That helped the dollar index strengthen, making commodities priced in the US currency more expensive for buyers using other currencies.
Comments
Comments are closed for this article.