Prices of most base metals fell on Tuesday as traders gauged the risks of a global economic downtrend and weak consumption, shedding gains logged in the previous session after top consumer China reopened its borders.
Three-month copper on the London Metal Exchange was down 0.8% at $8,786 a tonne, as of 0422 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange rose 1.3% to 66,490 yuan ($9,823.01) a tonne, tracking overnight gains in London.
LME aluminium dipped 0.4% to $2,429 a tonne, zinc declined 1.2% to $3,168.50 a tonne, lead fell 1.3% to $2,222 a tonne and tin shed 1.4% to $25,500 a tonne.
SHFE lead declined 0.6% to 15,480 yuan a tonne, tin was down 0.6% at 204,200 yuan a tonne, while aluminium rose 1.5% to $18,175 a tonne and zinc climbed 1.9% to 23,760 yuan a tonne.
Base metals prices rose strongly on Monday, driven higher by an improving demand outlook after top consumer China reopened its border after years of restrictions due to the COVID-19 pandemic, boosting LME copper to its highest in more than six months.
But fundamentally, the global economy is still at risk of a recession and the US dollar could still firm up even more amid prospects of further interest rate hikes, making greenback-priced metals more expensive to holders of other currencies.
Demand angst puts copper on track for largest drop since 2018
Physical demand of metals is also expected to slow as China is about to enter its week-long holiday break to celebrate the Lunar New Year during Jan. 23-27.
Yangshan copper premium, which indicates demand for imported copper into China, fell to $37.50 a tonne on Monday, from $152.50 a tonne seen less than three months earlier.
SHFE nickel hit a one-month low of 204,680 yuan a tonne on rising supply worries after Bloomberg reported that nickel producer Tsingshan is looking to boost refined nickel output in China from intermediate forms like ferronickel.
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