LONDON: Copper and aluminium prices retreated on Thursday, weighed down by more coronavirus curbs in top metals consumer China, a firmer dollar and rising aluminium inventories.
They pared losses, however, after traders bet on a slightly less-hawkish path for US Federal Reserve rate hikes.
Three-month copper on the London Metal Exchange slipped 0.8 percent to $7,733 a tonne by 1600 GMT after falling as low as $7,663 in earlier trading.
LME copper climbed 3.6 percent on Wednesday.
US Comex copper futures dropped 0.8 percent to $3.52 a lb.
“People were starting to get a bit bullish yesterday with copper stocks tight, but it was overdone and also the dollar is stronger today, so the market is pulling back,” said Robert Montefusco at broker Sucden Financial.
Available LME copper inventories, those not earmarked for delivery, have tumbled 68 percent over the past three weeks. But LME copper prices have slumped 21 percent so far this year, burdened by worries about a global recession and strict Covid-19 lockdowns in China that have dampened growth.
China on Thursday reported a third straight day of more than 1,000 new COVID cases nationwide, spurring cities from Wuhan in central China to Xining in the northwest to double down on COVID-19 curbs.
At the same time, profits at China’s industrial firms fell at a faster clip in January-September as Covid-19 curbs and a property crisis continued to weigh heavily on factory activity.
“The economic weakness and subdued demand have cut producers’ price tolerance of raw materials,” a China-based copper product producer said.
A firmer dollar index also weighed on the market, making metals priced in the US currency more expensive for buyers using other currencies.—Reuters
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