LONDON: Copper prices fell on Tuesday as tit-for-tat sanctions between China and the West and new coronavirus lockdowns in Europe spread a sober mood through markets, while aluminium slipped due to rumours that the Chinese state will sell stockpiled metal.
Benchmark copper on the London Metal Exchange (LME) was down 1.8% at $8,945 a tonne and aluminium was down 2.4% at $2,218.50 at 1741 GMT.
Both metals have rallied from slumps early in the pandemic as industrial activity revived and central banks pumped cash into markets.
Copper reached $9,617 a tonne, its highest since 2011, in February, and aluminium on Monday rose to $2,289.50, its priciest since 2018.
Falling stock markets and oil prices and a stronger dollar were weighing on prices, said Commerzbank analyst Daniel Briesemann.
“But China is about to start its construction season, which should come with higher demand... Prices can still go up further,” he said.
The United States, the European Union, Britain and Canada imposed sanctions on Chinese officials for human rights abuses in Xinjiang. Beijing hit back immediately with measures against the European Union.
Germany and France are extending coronavirus restrictions to quell a rise in infections.
China is considering selling about 500,000 tonnes of aluminium from its state reserves to help cool prices and meet emissions targets, Bloomberg News reported, citing an unnamed person with knowledge of the matter.
The administration’s press service said it did not have information and could not comment.
Indonesia will grant miners export permits for unrefined mineral ores even if construction of their refining facilities is delayed, according to a document seen by Reuters.
A surplus in the zinc market shrank in January from December, while the lead market flipped into surplus, data from the International Lead and Zinc Study Group showed.
LME zinc fell 1.4% to $2,825 a tonne, nickel was down 2.6% at $16,062.83, lead slipped 1.2% to $1,949 and tin was 0.8% lower at $25,605.
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