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 1.3% to $9,470 a tonne by 1600 GMT, after giving up about 2% over the past three sessions.
US Comex futures rose 1.1% to $4.31 a lb.
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.
While Chinese COVID restrictions are likely to be lifted in coming months, developed economies are set for weaker growth, Bain said.
“The combination of subdued growth in China and a slowdown in the US and Europe, means that prices have further to fall,” she said, adding that her year-end price target for copper was $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.
The two best LME performers were zinc and nickel, used for galvanising steel and as an alloy in stainless steel respectively, after a rally in Chinese ferrous markets on hopes of more stimulus.
LME nickel advanced 3.8% to $28,220 a tonne after surging as much as 7% to the highest since May 9. Al Munro at broker Marex said nickel got added impetus by breaking its downtrend. Zinc climbed 3% to $3,846.
Workers at Russian aluminium giant Rusal’s Guinea bauxite mine Compagnie des Bauxites de Dian-Dian went on strike on Thursday, a move Rusal said was illegal.
LME aluminium added 0.2% to $2,870.50 a tonne, lead climbed 1.7% to $2,163.50 and tin rose 1% to $33,960.
Comments
Comments are closed.