LONDON: Copper prices rebounded on Friday, breaking three days of losses on a weaker dollar and hopes for a recovery in top metals consumer China from tough COVID lockdowns.
Three-month copper on the London Metal Exchange gained 1% to $9,450 a tonne by 0950 GMT, after giving up about 2% over the past three sessions.
The most-traded July copper contract on the Shanghai Futures Exchange ended daytime trade 1% higher at 71,900 yuan ($10,677.64) a tonne.
Shanghai took more gradual steps on Friday towards lifting its COVID-19 lockdown while Chinese equities gained on hopes for additional stimulus measures.
Caroline Bain, chief commodities economist at Capital Economics, was wary that China would offer huge support for its economy.
“The Chinese authorities are moving quite cautiously on stimulus. I think things will have to get a bit worse (to see major stimulus),” Bain said.
Copper falls as investors fear global economic slowdown
While Chinese COVID restrictions are likely to be lifted in coming months, developed economics are set for weaker growth, Bain said.
“The combination of subdued growth in China and a slowdown in the U.S. and Europe, means that prices have further to fall,” she said, adding that her year-end price target for copper is $9,000.
Supporting the metals market was a softer dollar index, which sank to a one-month low as traders lowered Federal Reserve rate hike expectations. A weaker greenback makes metals priced in dollars cheaper for holders of other currencies.
Workers at Russian aluminium giant Rusal’s Guinea bauxite mine Compagnie des Bauxites de Dian-Dian went on strike on Thursday, in a move Rusal said was illegal.
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LME aluminium rose 0.6% to $2,882 a tonne, zinc climbed 1.8% to $3,801.50, lead added 0.4% to $2,136.50, tin advanced 0.8% to $33,905, and nickel jumped 3.9% to $28,250.
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