LONDON: Copper prices rebounded on Friday after top metals consumer China pledged more support for its ailing economy and the dollar fell from 20-year highs, but the metal was still set for its biggest monthly fall since September.
A weaker dollar made greenback-denominated metals cheaper for buyers using other currencies, which increases their attractiveness.
Meanwhile, the top decision-making body of China’s Communist Party said the country would step up policy support to stabilise the economy and offset the impact of lockdowns put in place to slow the spread of COVID-19.
China accounts for about half of global metals demand.
Benchmark three-month copper on the London Metal Exchange (LME) rose 0.8% to $9,780 a tonne by 1550 GMT, on track for a monthly fall of more than 5%.
“We have some positive news from China’s Politburo, which pledged more measures to spur economic growth because the economy has been struggling,” said ING analyst Wenyu Yao.
The COVID-19 outbreak in China bodes ill for Beijing’s economic outlook and metals demand.
More businesses and residential compounds closed in Beijing and authorities ramped up contact tracing to contain the spread of the virus. The southern Chinese megacity of Guangzhou also moved to quash its COVID-19 outbreak.
The latest COVID-19 wave is likely to cause a further decline in Chinese factory activity in April, a Reuters poll showed, with extensive lockdowns halting production and disrupting supply chains. China reports its closely watched factory activity data on Saturday.
POLL: Copper prices are due to tick higher in the second half of the year, according to a Reuters poll, as disruptions at mines and low inventories restrict supply and deepen deficits.
SUPPLY: Peruvian police evicted indigenous protesters from MMG’s Las Bambas copper mine for a second day on Thursday as they dispersed a camp set up on company property, an adviser to the community told Reuters.
The mine, which accounts for 2% of global copper supply, has been closed since April 20 and has a long history of disruptions because of community disputes. Southern Copper’s mine in Peru is also shut.
ALUMINIUM: Benchmark prices for aluminium were set for their biggest monthly fall in more than 13 years on concerns about Chinese demand. On Friday, LME aluminium rose 1% to $3,064 a tonne.
OTHER METALS: Zinc fell 1.5% to $4,071, lead was down 0.3% at $2,262, tin slipped 1.1% to $40,485 and nickel dropped 2.8% to $32,060.