LONDON: Copper prices slid to their lowest in more than two weeks on Monday, pressured by fresh COVID curbs in top consumer China, a stronger dollar and rising inventories in warehouses registered with the London Metal Exchange.
Benchmark copper on the LME was down 2.2% at $7,901 a tonne at 1703 GMT from an earlier $7,858, the lowest since Nov. 4.
Beijing’s most populous district urged residents to stay at home on Monday, while the capital reported an increase in COVID-19 cases. Local authorities in the southern Chinese city of Guangzhou locked down the area for five days.
“Hopes of a rapid reopening in China have been disappointed,” said Julius Baer analyst Carsten Menke.
“The elephant in the room is the property market. I don’t buy that because people don’t have to quarantine anymore, they will go out and buy homes, confidence has been badly shaken.” Property and construction account for a large part of copper consumption in China.
A recent Reuters survey showed China’s property sector will remain weak but see a gradual recovery in 2023, while prices of new homes are expected to fall in the first half of next year.
Copper stocks in LME registered warehouses at 91,250 tonnes are up more than 15% since Nov. 10, while cancelled warrants - or metal earmarked for delivery - at 21% of the total are down from 66% in late October.
Easing concerns about LME copper supplies have created a discount for the cash over the three-month contract
The higher US currency weighed on industrial metals overall as it makes dollar-priced commodities more expensive for holders of other currencies.
Aluminium ceded 2.1% to $2,378 a tonne, zinc lost 4% to $2,910, lead was down 2.5% at $2,101 and nickel fell 1.2% to $25,075.
Tin tumbled 6.6% to $21,170 a tonne.
“Production has strongly recovered this year and tin is exposed to a further slowdown in consumer goods spending as ex-China economic activity deteriorates,” said Citi analyst Tom Mulqueen.
Citi expects tin prices to fall to $18,000 a tonne over the next three months.
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