LONDON: Copper and aluminium prices slipped on Tuesday, crimped by a firmer dollar and uncertainty about the easing of COVID-19 restrictions in top metal consumer China.
Three-month copper on the London Metal Exchange dipped 0.1% to $8,383 a tonne by 1100 GMT, while aluminium eased 1.3% to $2,491.
Copper has gained 12% this month, largely on hopes for improved metals demand as China relaxes tough coronavirus curbs, which have depressed economic growth.
China’s capital Beijing dropped the need for people to show negative COVID tests to enter supermarkets and offices, the latest in an easing of curbs across the country following last month’s historic protests.
“We are in a wait-and-see mode since the reopening in China will take time. We may have already built in some of the optimism into the price, so now we need to see the actual facts on the ground start to improve,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“Copper could still mount another challenge to the upside, especially if news out of China continues to improve, but there’s the question of how much energy is left in the market at this time of year.”
Copper falls on China COVID protests but dollar supports
The Yangshan copper premium fell to its lowest since July 22 to $72.50 a tonne on Monday, indicating weakening demand for imported copper into China.
The most-traded January copper contract on the Shanghai Futures Exchange fell 0.7% to 65,770 yuan ($9,402.43) a tonne.
Also weighing on the market was a firmer dollar index following its biggest rally in two weeks after strong U.S. services data fuelled expectations for higher interest rates.
A stronger dollar makes greenback-priced commodities more expensive to buyers using other currencies.
LME zinc, however, swam against the weaker tide, rising 1.4% to $3,169 a tonne after further falls in LME inventories, which have halved since the start of September.
In other metals, LME nickel slid 2.4% to $28,005 a tonne, lead slipped 0.6% at $2,224.50 and tin dropped 0.6% to $24,300.
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