LONDON: Copper prices rebounded on Friday as investors bought in at lower prices after heavy losses the previous day, driven by concerns that strong US economic data could spur tighter monetary policy.
Three-month copper on the London Metal Exchange (LME) had gained 1.9% to $9,972.50 a tonne by 1600 GMT, having lost as much as 3.8% in the previous session.
It extended gains along with stock markets after US jobs data came in weaker than expected, easing fears that the Federal Reserve would withdraw stimulus measures.
Copper hit a record peak of $10,747.50 last month, fuelled by optimism over global economic recovery and new demand from an expected green revolution including the shift to electric vehicles.
“It’s bouncing today because of bargain hunting. The overall attitude is still bullish for industrial metals and commodities in general,” said Julius Baer analyst Carsten Menke in Zurich.
“The fundamentals for industrial metals are good, but expectations have been excessive as to where prices should be based on the fundamental backdrop,” Menke added.
In China, prices fell to their lowest in nearly six weeks, with the most-traded July copper contract on the Shanghai Futures Exchange dropping as much as 3.6% to 70,470 yuan ($11,001) a tonne. Supporting the metals market was a weaker dollar index, which gave up earlier gains after the US jobs data, making commodities priced in the US currency cheaper for buyers using other currencies. Russian metals producer Nornickel resumed ore mining at the second of its two mines hit by flooding this year, it said on Friday.
LME tin jumped 2.7% to $30,805 a tonne after Malaysia Smelting Corp, the world’s third-largest tin producer, said it would temporarily close due to a new Covid-19 lockdown, according to the International Tin Association.
LME aluminium advanced 2.2% to $2,457.50 a tonne, zinc rose 0.8% to $3,007.50, lead dropped 1.3% to $2,144 and nickel climbed 0.8% to $18,030.
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