BENGALURU: Copper edged up on Friday, but was heading for its first yearly decline since 2018 as an overall stronger dollar, worsening Covid-19 situation in top consumer China and fears over global recession weighed on prices.
Low inventories and hopes for economic recovery could, however, provide a fillip to industrial metals next year, analysts said. Three-month copper on the London Metal Exchange was up 0.1% at $8,427.50 a tonne, as of 0738 GMT.
The metal, used in power and construction and seen as a gauge for the health of the global economy, was down 13.2% in 2022. Other industrial metals on the LME, except nickel, were also on track for a yearly fall, down between 2% and 35%.
On the Shanghai Futures Exchange, the most-traded February copper contract ended daytime trading down 0.1% at 66,260 yuan ($9,530.52) a tonne and was down 1.1% for the year.
“Base metals should come under pressure in first half of 2023 as inflation continues to taper off, and the world economy seems to slowdown as higher rates takes a toll,” a Singapore-based metals trader said.
“The counter to this is that China ensuring that credit is flowing to complete the projects and demand for raw materials should continue to chug higher compared to during the China property debt crisis period.”
Beijing began dismantling its strict Covid curbs this month in an abrupt policy U-turn and on Monday announced it would drop its quarantine rule for inbound travellers from next month. China’s strict Covid containment policy has curbed industrial activity and domestic demand, and last month ignited public unrest. China has stepped up support for its embattled property sector and said it will boost fiscal spending “appropriately” in 2023 to support the slowing economy.
The dollar was on track for its best performance in seven years, buoyed by the US Federal Reserve’s aggressive monetary policy tightening and concerns about the global growth outlook. Copper stocks in LME warehouse have halved since May to 81,350 tonnes as of Thursday.
Among other metals, LME aluminium was up 0.2% at $2,410 a tonne, zinc rose 0.1% to $2,987, lead fell 0.4% to $2,264 and tin climbed 1.5% to $25,290. LME nickel was heading for its best year since 2009, up nearly 46% this year.
In Shanghai, aluminium was flat at 18,700 yuan a tonne, tin rose 2.2% to 211,890 yuan, zinc slipped 0.3% to 23,765 yuan, nickel gained 1.7% to 232,000 yuan and lead was steady at 15,925 yuan.
Source: Brecorder
