LONDON: Copper prices crept lower on Friday due to ongoing worries that a global recession and rising COVID-19 cases in China would depress economic growth and demand for metals.
Three-month copper on the London Metal Exchange slipped 0.3% to $8,272 a tonne by 1130 GMT, after touching its highest in more than five months at $8,600 on Monday.
It has declined 3.4% so far this week.
“China’s COVID problems are still a headwind for industrial metals prices,” said Edward Gardner, commodities economist at Capital Economics.
“Although we’ve seen restrictions ease, our China economics team is making the point that the near-term outlook for China’s activity is pretty bleak.”
China, the top market for metals, set out urgent plans to protect rural communities from COVID-19 on Friday as millions of city-dwellers planned holidays for the first time in years.
Copper prices fall on weak China data and hawkish Fed
The most-traded January copper contract on the Shanghai Futures Exchange fell 1.14% to 65,260 yuan ($9,370.24) a tonne.
China has introduced some policies to bolster the property industry, but efforts to boost domestic growth will not be felt in the near-term, StoneX Financial analyst Natalie Scott-Gray said.
The U.S. Federal Reserve and other major central banks raised policy rates this week and indicated more hikes were likely, fuelling fears of a global slowdown.
“We think the value of industrial metals is still a bit overdone and we see prices falling over the next couple of months,” said Gardner, adding that the trough for copper is forecast at $7,000 in the second quarter of 2023.
Among other metals, LME aluminium gained 1.1% to $2,411 a tonne, nickel rose 1% to $28,595, lead added 0.5% to $2,163, but zinc shed 2.1% to $3,092.50 and tin slipped 0.7% to $23,435.