LONDON: Copper prices crept lower on Wednesday on a firmer dollar and uncertainty about a how quickly top metals consumer China can recover from the economic damage of COVID lockdowns.
Three-month copper on the London Metal Exchange was down 0.4% at $9,414.50 a tonne by 1030 GMT after falling 1% in the previous session.
Copper, often used as a gauge of global economic health, has fallen more than 13% since scaling a record peak of $10,845 in March.
“The market is still uncertain. China is reopening and some processing companies are ramping up production, but it’s not a full recovery yet,” said Xiao Fu, head of commodity market strategy at Bank of China International.
China’s financial hub Shanghai sprung back to life on Wednesday after two months of bitter isolation under a ruthless COVID-19 lockdown.
Copper steady on hopes of demand boost from China
“There are various ways that China can boost their economy and infrastructure projects are the most relevant for metals, but it takes time. It may not have an impact in the short term, it could span across the second half.”
The most-traded July copper contract in Shanghai ended daytime trading down 0.7% at 71,600 yuan ($10,714) a tonne.
Adding to growth worries, Asia’s factory activity slowed in May as China’s heavy-handed coronavirus curbs continued to disrupt supply chains and dampen demand.
The dollar rose against its rivals, lifted by higher Treasury yields as global inflation worries flared anew.
A stronger dollar makes greenback-denominated metals more expensive for buyers using other currencies.
Global aluminium producers have offered Japanese buyers premiums of $172 to $177 a tonne for July-September primary metal shipments, which would be between unchanged and 2.9% higher compared with the current quarter, sources said.
A fire broke out on Tuesday in Peru’s massive Las Bambas copper mine, a source told Reuters, amid clashes between police and an indigenous community that has occupied space there for more than a month.
LME aluminium eased 1.2% to $2,755 a tonne, zinc fell 0.9% to $3,877.50, nickel slid 2.4% to $27,710, lead declined 1.2% to $2,156 and tin shed 0.8% to $34,400.