London copper prices edged lower on Friday and were on track for a third consecutive weekly loss, weighed down by COVID-19 lockdowns in top metals consumer China and rising inventories, with a stronger U.S. dollar adding to the downbeat mood.
Benchmark three-month copper on the London Metal Exchange (LME) was down 0.1% at $10,278.50 a tonne, as of 0545 GMT. The contract dropped nearly 0.4% so far this week.
The most-active May copper contract on the Shanghai Futures Exchange rose 0.7% to 74,970 yuan ($11,590.37).
“Weaker expectations of growth amid slowdown and COVID in China is weighing on base metals,” said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
“Also, the dollar index moving higher due to a spike in U.S. yields is adding negative pressure on commodity prices.”
China’s financial markets are not immune to external shocks and the COVID situation also put more pressure on China’s economy, governor of the People’s Bank of China Yi Gang said on Friday.
Earlier this week, the International Monetary Fund slashed its forecast for global economic growth, citing the Russia-Ukraine conflict, further dampening hopes of global demand.
Copper, used in power and construction, is generally used to gauge global economic health.
Copper rebounds after miners report sliding production
Making greenback-denominated metals more expensive for holders of other currencies, the dollar was headed for its best one-week gain on China’s yuan in more than two years on higher U.S. yields.
Copper inventories in LME-approved warehouses rose 2,500 tonnes to 130,500 tonnes on Thursday, their highest since last October. Stocks of copper on the LME system have now climbed 62% over the last four weeks.
PANDEMIC: Shanghai said on Friday it would lift its lockdown in batches once virus transmission outside quarantined areas was stamped out. Mainland China reported 18,598 new coronavirus cases on April 21.
PRODUCTION: Chilean miner Antofagasta’s first-quarter copper production fell 24% year-on-year, while Freeport-McMoRan Inc trimmed its 2022 and 2023 copper forecast due to expansion challenges in Indonesia.
OTHER METALS: LME aluminium was down 0.1% at $3,296.50 a tonne, zinc fell 0.7% to $4,419.50, lead eased 0.3% to $2,395, while tin slipped 0.7% to $42,550.
Shanghai aluminium added 0.1%, nickel rose 1.3%, lead gained 0.8%, while tin slipped 0.4%.
Comments
Comments are closed.