Copper prices rose to three-week highs on Monday as hopes of stronger demand were boosted by the easing of COVID restrictions in China, expectations of further reopening of the country’s economy and a weaker dollar.
* Benchmark copper on the London Metal Exchange was up 0.3% at $8,479 a tonne at 1122 GMT, after hitting $8,550 a tonne previously, the highest level since November 14.
* China’s zero-COVID policy has become an outlier globally as most countries seek to live with the disease, despite Beijing taking 20 new measures to simplify controls last month against a of growing public frustration.
* “Futures are trading on China reopening and a weaker dollar,” said Geordie Wilkes, an analyst at Sucden Financial, adding that a full reopening in China was some way off. “But the physical market is not as tight as it used to be and demand is low.”
* Weak fundamentals were highlighted last week with the release of China’s official manufacturing purchasing managers’ index (PMI), which at 48 for November was the lowest in seven months.
* Federal Reserve officials who signaled less aggressive rate hikes than previously suggested have seen the dollar slide against other major currencies.
* A lower US currency makes dollar-denominated metals cheaper for holders of other currencies, which could boost demand.
* Meanwhile, aluminum was down 1.1% at $2,517 a tonne from a previous $2,577, the highest level since June 16. Zinc was up 1.6% at $3,129; Lead was up 0.7% at $2,219; tin rose 4% to $24,200; and nickel was down 1.9% at $28,300.