Copper prices advanced on Monday, as declining inventories and improved exports in top consumer China overshadowed fears of weakening demand from a global recession.
Three-month copper on the London Metal Exchange CMCU3 rose 0.1% to $7,877 a tonne by 0533 GMT, while the most-traded September copper contract on the Shanghai Futures Exchange SCFcv1 advanced 1.8% to 60,770 yuan ($8,985.66) a tonne.
China’s copper imports rose 9.3% from a year earlier as the sharp drop in prices triggered buying appetite, while the country’s overall exports growth unexpectedly picked up speed in July, easing some worries about metals demand in its top market.
ShFE copper stockpile CU-STX-SGH have dropped 79% since March to 34,768 tonnes, their lowest levels since Jan. 28.
But with Germany sliding into recession, the United States gripped by inflation and rising interest rates and China battling with its COVID-19 outbreaks, metals outlook remained uncertain, Malcolm Freeman, director of Kingdom Futures, said in a note.
LME copper prices have tumbled 27% from their record peak of $10,845 a tonne hit in March this year.
Companies are bracing for a tough second half of the year, cutting jobs and slowing hiring as growth slows.
“It is very hard to make a bullish argument for the metals at the moment,” Freeman said, adding that the U.S.-China tension over Taiwan also posed a threat.
LME zinc CMZN3 dropped 1.6% to $3,432.50 a tonne, while lead CMPB3 rose 0.3% to $2,076 a tonne and tin CMSN3 advanced 0.4% to $24,550 a tonne.
The premium of LME cash lead over the three-month contract MPB0-3 rose to $24.75 a tonne, the highest since July 12.
ShFE nickel SNIcv1 dropped 2.2% to 169,760 yuan a tonne, aluminium SAFcv1 declined 0.4% to 18,355 yuan a tonne, zinc SZNcv1 decreased 1% to 24,185 yuan a tonne while lead SPBcv1 rose 0.8% to 15,295 yuan a tonne.
