Copper falls on rising COVID cases in China and firm dollar

Copper falls on rising COVID cases in China and firm dollar

Copper and aluminum prices fell on Thursday, weighed down by new production restrictions caused by the coronavirus in China – the world’s main consumer of metals -, the firmness of the dollar and the increase in aluminum inventories.

* At 1000 GMT, three-month copper on the London Metal Exchange (LME) fell 1.5% to $7,676 a tonne, after rising 3.6% on Wednesday.

* “People were starting to get a little bit bullish yesterday on tight copper stocks but it was overdone and also the dollar is stronger today so the market is pulling back,” said Robert Montefusco of Sucden Financial.

* Available copper inventories on the LME, those not earmarked for delivery, have fallen 68% in the past three weeks.

* However, LME copper prices have plunged 21% so far this year, weighed down by concerns about a global recession and China’s strict COVID-19 lockdowns, which have slowed growth.

* On Thursday, China reported a third straight day of more than 1,000 new COVID cases across the country, prompting cities from central Wuhan to northwestern Xining to tighten restrictions.

* The firm dollar index also weighed on the market, making metals priced in the US currency more expensive for buyers using other currencies.

* In other base metals, aluminum on the LME fell 1.7% to $2,295.50 a tonne, after rising as much as 5.4% the day before; zinc rose 0.5% to $2,963.50; tin gained 0.6% to $18,795; nickel fell 1.9% to $22,235; and lead was down 0.1% at $1,888.50.

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