Copper prices rose on Thursday on expectations that top metals consumer China’s COVID-19 battle will have minimal impact on demand, while zinc succumbed to profit-taking after hitting a five-week high in the last session on worries over tight supply.
Three-month copper on the London Metal Exchange edged up 0.4% to $10,335.50 a tonne, as of 0704 GMT, keeping it on track for a weekly gain.
The most-active May copper contract on the Shanghai Futures Exchange ended daytime trading up 0.4% at 74,180 yuan ($11,651.25) a tonne.
While China struggles to contain another wave of COVID-19 infections, causing logistical bottlenecks, indications suggest minimal impact on demand, with tight supplies likely to drain inventories in the medium term, ANZ commodity strategists said in a note.
“Our Copper Demand Indicator suggests consumption is holding up well, driven by a pick-up in the power sector,” they said. “This is within a better growth impulse in China, as the government looks to support economic activity.”
China will use timely cuts in banks’ reserve requirement ratios and other policy tools to support the world’s second-biggest economy, the cabinet said on Wednesday, as headwinds increase amid COVID-19 outbreaks.
Adding to supply worries, Southern Copper Corp’s Peruvian mine remains closed after six weeks of a standoff with protesters, as the company accused Peru’s government of failing to intervene to guarantee security for its 1,300 workers and their families.
Zinc: London zinc slipped 1.4% to $4,400 a tonne, after hitting a five-week high in the previous session, underpinned by supply worries as inventories shrank and smelters in Europe struggled amid a spike in energy costs.
Shanghai zinc dipped 2%, after climbing to its highest in nearly 15 years on Wednesday.
Other metals: LME aluminium rose 0.6% to $3,255 a tonne, lead fell 0.8% to $2,412 and tin eased 0.5% to $43,100.
Shanghai aluminium climbed 1.2%, nickel rose 2%, lead shed 0.5%, while tin jumped 1.6%.