LONDON: London copper prices hit their lowest in nearly four weeks on Monday as a firm dollar made greenback-priced metals more expensive to holders of other currencies.
The three-month copper on the London Metal Exchange fell 0.5% to $8,935.50 a tonne by 0757 GMT. Earlier in the session, it hit $8,904.50, its lowest since Jan. 10.
The most-traded March copper contract on the Shanghai Futures Exchange closed down 0.8% at 68,340 yuan ($10,077.12) a tonne, on track for its third consecutive session of loss.
The dollar touched a near four-week high against a basket of currencies after a strong US jobs report on Friday suggested the Federal Reserve could stay hawkish with its monetary policy for longer.
Metals prices are also pressured by doubts over China’s pace of recovery after the country removed its strict COVID restrictions. Bets on a strong recovery in Chinese demand boosted metals prices for most of January.
“We believe the sector’s performance is running ahead of fundamentals as demand is yet to improve materially. Any macro disappointment could lead to a short-term price correction before seeing a sustained rise in prices,” ANZ analysts said in a note. “China’s reopening and improving economic backdrop is supportive for the sector,” they added.
Risk sentiment also soured amid rising Sino-US geopolitical tensions after the US military shot down a suspected Chinese spy balloon, which China said is used for meteorological purposes. However, the threat of supply disruptions prevented copper prices from a steeper fall.
Production disruptions in the major copper-producing regions of Latin America and Africa have raised the stakes for a tighter market this year, but analysts say it is too soon to downgrade forecasts for global supplies.
LME zinc decreased 1.7% to $3,187.50 a tonne, tin dropped 3.1% to $27,490 a tonne, and aluminium edged down 0.9% to $2,545.50 a tonne while lead rose 1.2% to $2,125 a tonne.
SHFE aluminium closed almost unchanged at 19,060 yuan a tonne, nickel dropped 3.5% to 213,610 yuan a tonne, tin fell 4.4% to 219,760 yuan a tonne, zinc decreased 2.7% to 23,515 yuan a tonne and lead ended unchanged at 15,310 yuan a tonne.
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