Benchmark London copper prices slipped in choppy trade on Wednesday as the US dollar steadied following big losses the day before, while speculation that top metal consumer China may soon ease its zero-COVID policy lent some support.
Three-month copper on the London Metal Exchange was down 0.2% at $7,703 a tonne, as of 0716 GMT.
The dollar steadied on Wednesday after a sharp rate rise in New Zealand poured cold water over hopes for a pause or slowdown in the US Federal Reserve’s intentions for aggressive hikes.
The dollar’s weakness, which makes greenback-priced metals cheaper for holders of other currencies, had helped lift copper prices to their highest in more than a week on Tuesday.
“Tighter monetary policy has been a strong headwind for base metals, with concerns demand will falter amid higher borrowing costs,” said ANZ senior commodity strategist Daniel Hynes.
Copper held firm despite a possible labour deal in a mandatory mediation process to avoid a strike at Antofagasta Minerals’ Los Pelambres copper mine.
Growing speculation that Beijing may soon start relaxing its zero-COVID strategy has provided some support to copper, Hynes said.
“Even a partial relaxation would be welcome news for the sector (as) demand has been crippled by the ongoing lockdowns across the country,” he said. Base metals trading remained subdued though with the Shanghai Futures Exchange closed until Oct. 7 for China’s Golden Week holidays.
Lead was up 1.2% at $1,959 a tonne, aluminium gained 0.5% to $2,360, zinc shed 0.1% to $3,043, nickel dropped 0.1% to $22,035 and tin slipped 0.1% to $20,190.