Copper bounces, but set for weekly decline of 3%
- Three-month copper on the London Metal Exchange gained 1.8% to $9,099 a tonne in official trading after sliding by 2.4% in the previous session
LONDON: Copper prices rebounded on Friday, but were on pace to post a weekly decline of nearly 3%, with traders warning that more losses were likely due to concerns over energy prices and Chinese growth.
Three-month copper on the London Metal Exchange gained 1.8% to $9,099 a tonne in official trading after sliding by 2.4% in the previous session.
The contract, which has eased from a record of $10,747.50 hit in May, was set to post a weekly decline of nearly 3%.
"We got close to a key area of support, which has become a major line in the sand, and it held, so that's attracting some short-covering as we approach the weekend," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"But the overriding risks from a short-term perspective are still there. The technical outlook looks pretty grim on some of the key stock market indexes while the continued rise in fuel costs is sapping the industry's ability to produce and grow."
Copper eases as Fed taper talk boosts dollar
The situation in top metals consumer China was also worrying, with factory activity showing a contraction for the first time since February last year at the same time as a looming debt crisis has hit property giant China Evergrande Group.
"Although the power crisis could have a mixed impact on supply and demand for commodities, the market is giving more weightage to the resulting demand losses from slowing economic growth," said ANZ analysts in a note.
Chinese markets were closed on Friday for a week-long public holiday.
LME aluminium rose 0.8% in official activity to $2,880 a tonne, zinc added 0.6% to $3,007 and lead advanced 1.5% to $2,124 after touching its lowest since April 26 in the previous session at $2,060.
Nickel climbed 0.8% to $18,080 a tonne and tin edged up 0.1% to $33,950.
An alumina refinery in Jamaica that was damaged by fire and shut down in August is not expected to be back at 100% production for another year, until the end of September 2022, operating partner Noble Group Holdings said.
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