Prices of London copper, often used to gauge global economic health, rose to a nearly one-week high on Tuesday as top metals consumer China’s decision to ease some COVID-19 restrictions fuelled expectations of a recovery in demand.
Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.8% at $9,313.50 a tonne by 0710 GMT, after hitting its highest since May 11 at $9,342.50.
The most-active June copper contract on the Shanghai Futures Exchange SCFcv1 ended daytime trading up 1% at 71,790 yuan ($10,622.97) a tonne.
“The pace of interest rate hikes is more or less baked in by now, the next thing on the market’s mind is the Shanghai reopening as community cases are zero for three days now,” a metals trader in Singapore said.
“Also, crude has been marching higher and helping commodities move higher,” the trader said.
Shanghai set out plans on Monday for ending a painful COVID-19 lockdown that has lasted more than six weeks, heavily bruising China’s economy.
The commercial hub of 25 million on Tuesday achieved the long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones.
Copper, which is used in power and construction sectors, fell to a five-month low last week as aggressive U.S. rate-hike bets and lockdowns in China led to slowdown concerns.
CRUDE: Oil prices rose to multi-week highs on Monday on hopes that China would see significant demand recovery. O/R
SUPPORT: China’s state planner will strengthen support for manufacturers, the service sector and small firms, it said on Tuesday, as strict COVID-19 lockdowns rattled economic activity.
DOLLAR: The dollar =USD slipped for a third straight day against its rivals, making greenback-denominated metals less expensive for buyers using other currencies. /
SUPPLY: Aluminium inventories in LME warehouses, already at their lowest in nearly 17 years, are likely to fall further over the coming days and weeks, as more metal leaves the LME system and heads for Europe where supplies are scarce.
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PRICES: LME aluminium CMAL3 eased 0.1% to $2,830 a tonne, zinc CMZN3 was up 1.6% at $3,620, lead CMPB3 climbed 0.7% to $2,110, while nickel CMNI3 slipped 0.8% to $26,325 and tin CMSN3 fell 1.4% to $33,400.
Shanghai aluminium SAFcv1 fell 1.2%, zinc SZNcv1 was up 1.3%, nickel SNIcv1 eased 0.2%, lead SPBcv1 was up 0.1%, while tin SSNcv1 slumped 1.5%.
