LONDON: Copper prices recovered slightly on Friday on the prospect of a strike in the world’s biggest copper producer Chile and signs of improvement in top buyer China’s economy.
Three-month copper on the London Metal Exchange added 0.3% to $9,097 a tonne in official open-outcry trading after slumping by 1.7% on Thursday. It was on track to shed about 4% this week.
“There are risk of strikes in Chile, that could be giving copper a bit of a lift today, and the activity data from China this week was a bit better than expected,” said Caroline Bain, chief commodities economist at Capital Economics in London.
Workers at Chilean state-owned Codelco, the world’s largest copper producer, will go on strike if they do not receive a favourable answer from the company’s board of directors Friday, the union said.
But there is risk of more losses in base metals due to the slowdown in China and uncertainty about COVID-19 restrictions, Bain added.
“Industrial metals are really not sure what direction to take on China. One day there’s a headline saying everything’s opening up. The next day there’s a partial close-down again.”
LME aluminium dipped 0.2% to $2,500 a tonne after falling to its lowest since July 28 at $2,487 on Thursday. The contract is down nearly 7% so far this week.
Weighing on metals was a firmer dollar index ,making greenback-priced commodities more expensive for buyers using other currencies.
Shanghai’s economy contracted for a second month in May although at a somewhat slower pace, data showed, weighing on the commercial hub’s recovery prospects following a two-month COVID lockdown.
LME zinc slipped 1.3% to $3,530 a tonne, lead dropped 0.8% to $2,084, but tin advanced 0.6% to $32,200 and nickel also gained 0.6% to $25,400.