LONDON: Copper prices extended their decline on Friday as investors fretted over the prospect of weak economic growth hitting metals demand after renewed COVID-19 lockdowns in China and increases to interest rates.
Three-month copper on the London Metal Exchange (LME) fell 0.8% to $9,540 a tonne in official open-outcry trading after dropping 1.2% in the previous session, though the contract has gained nearly 1% over the week.
“Copper is coming under several sorts of pressure. The lockdowns aren’t ending as quickly as hoped and China’s zero-COVID policy is very damaging for economic growth,” said Nitesh Shah, commodity strategist at exchange-traded fund provider WisdomTree.
“You’ve also got central banks in other parts of the world maintaining a very hawkish tilt and that puts into question whether economic growth outside of China is going to decelerate faster.”
China’s Shanghai commercial hub will lock down millions of people for mass COVID-19 testing this weekend, only 10 days after lifting its gruelling two-month lockdown.
Other risky assets also fell, with equities hitting a two-week low as the European Central Bank interest rate outlook and jitters over forthcoming U.S. inflation data stoked concerns over global growth.
The dollar rose against its rivals, making greenback-denominated metals more expensive for buyers using other currencies.
China’s factory-gate inflation cooled in May, official data showed, depressed by weak demand for steel, aluminium and other industrial commodities because of tight COVID-19 curbs.
There has been no change in control of major cobalt and copper producer Tenke Fungurume Mining in Congo, majority owner China Molybdenum said on Friday, contradicting a state mining company official.
A group of indigenous Peruvian communities on Thursday agreed to temporarily lift a protest against MMG’s Las Bambas copper mine. The protests had forced the company to halt operations for more than 50 days.
LME aluminium slipped 1.9% to $2,709.50 a tonne, nickel lost 2% to $27,450, zinc eased 0.7% to $3,736, lead fell 1.9% to $2,154 and tin was down 1.5% at $36,200.