London copper prices fell on Monday, after posting their biggest jump in nearly 14 years in the previous session, as demand recovery hopes receded after top consumer China reaffirmed its stringent COVID-19 restrictions to curb spreading outbreaks.
Three-month copper on the London Metal Exchange CMCU3 fell 1.1% to $8,013 a tonne by 0541 GMT, aluminium CMAL3 fell 2.1% to $2,305 a tonne, zinc CMZN3 shed 0.7% to $2,855 a tonne and tin CMSN3 declined 0.3% to $18,825 a tonne.
China is sticking with a strict COVID-19 containment strategy nearly three years into the pandemic, potentially disappointing investors hoping for a quick reopening, although authorities are making tweaks to managing the virus.
China’s copper imports slid 1.5% in October from a year earlier on softening demand amid COVID-hit factory activity and rising domestic production, while China’s trade unexpectedly contracted in October, missing expectations.
LME copper jumped 7.1% on Friday, its biggest daily jump since January 2009, boosted by rumour of China easing its zero-COVID rules.
Low copper inventories exacerbated the price spike on Friday, said CRU analyst Craig Lang, adding that China’s demand for copper cathode was supported by solid consumption from the electric vehicles and renewable energy sectors.
“(However), the news flow in the near term is going to be negative,” said Lang, adding that questions remained on when the market can refocus on the longer-term positive outlook for copper.
A stronger dollar also made greenback-priced metals more expensive to holders of other currencies.
The most-traded December copper contract on the Shanghai Futures Exchange SCFcv1 rose 3.4% to 65,740 yuan ($9,118.90) a tonne, tracking gains in overnight trade in the previous session in London.
SHFE zinc SZNcv1 advanced 2.5% to 23,610 yuan a tonne, tin SSNcv1 climbed 6.5% to 167,280 yuan a tonne, aluminium SAFcv1 rose 0.3% to 18,250 yuan a tonne while zinc SZNcv1 advanced 2.6% to 23,625 yuan a tonne.
