LONDON: Copper prices rebounded on Wednesday on hopes for a demand recovery in top metals consumer China and as the dollar erased gains.
Three-month copper on the London Metal Exchange rose 0.4% to $9,738 a tonne by 1600 GMT after dropping as low as $9,642 earlier and edging down 0.5% in the previous session.
US Comex futures added 0.3% to $4.45 a lb.
“We’re seeing the market trying to put in a tentative recovery on the prospect of normalisation in China,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Beijing and commercial hub Shanghai have been returning to normal in recent days after two months of bitter isolation under a ruthless lockdown.
But copper’s gains were capped by worries about global growth, which has left investors wary of taking bullish positions, Hansen said.
“Last week’s big jump was primarily driven by shorts finally surrendering, however, the turnaround to putting on long positions seems quite a bit more hesitant,” he said.
LME copper has rebounded about 8% since touching a seven-month low on May 12.
The OECD slashed its growth forecasts and jacked up its inflation estimates on Wednesday, one day after the World Bank cut growth estimates.
A firmer dollar index had earlier weighed on the market, making greenback-denominated metals more expensive for buyers using other currencies, but it lost the gains and traded flat in the afternoon.
South Korea’s LG Energy Solution on Wednesday broke ground on nickel processing plants in Indonesia, part of the company’s $9.8 billion investment in the country to produce electric vehicle batteries.
LME tin climbed 2.6% to $37,015 a tonne after data showed Indonesia refined tin exports fell 42.8% in May from the previous month’s volume.
LME aluminium advanced 1.6% to $2,824 a tonne, zinc gained 0.6% to $3,818, lead rose 0.1% to $2,226.50, but nickel lost 2.2% to $28,835.
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