LONDON: Copper prices retreated on Friday on concern that weak factory activity and COVID-19 lockdowns in top metals market China will dampen demand.
Three-month copper on the London Metal Exchange (LME) shed 1.2% to $10,255 a tonne in official open-outcry trading after two days of gains.
“Economic data in China slowed in March and people may worry that the current lockdowns in Shanghai could happen in other places,” said Xiao Fu, head of commodity market strategy at Bank of China International (BCI).
China’s factory activity slumped at the fastest pace in two years in March, data showed, while China’s commercial hub of Shanghai ground to a halt on Friday after the government locked down most of the city’s 26 million residents.
The most-traded May copper contract on the Shanghai Futures Exchange closed down 0.5% at 73,160 yuan ($11,514.55) a tonne after ending March with its eighth straight quarterly gain.
LME copper prices moved off their lows, however, and other metals gained on persistent worries about the impact on supply from the Ukraine conflict and resulting high energy prices.
“Fundamentals are only getting tighter globally, so the base metals market is likely to remain fairly tight and prices should be underpinned,” BCI’s Fu said.
Investors were cautious ahead of a US jobs report on Friday that could raise the likelihood of a 50 basis point increase to interest rates by the US Federal Reserve next month.
LME zinc was the top gainer and touched a three-week high, rising 2.1% to $4,262 a tonne after LME on-warrant inventories dropped 10% to 95,125 tonnes, their lowest since June 2020.
The dollar extended a rebound against major peers on Friday ahead of the US jobs data. A strong dollar makes greenback-denominated metals more expensive to buyers with other currencies.
LME aluminium added 0.2% to $3,497 a tonne, nickel advanced 1.9% to $32,700, lead gained 0.8% to $2,435 and tin was up 1.1% at $43,400.
Source: Brecorder
