By Pratima Desai LONDON (Reuters) – Copper prices rose on Tuesday as hopes for stronger demand after top consumer China relaxed its COVID-19 quarantine mandates were reinforced by a lower dollar, but worries about global growth capped gains. Benchmark copper on the London Metal Exchange was up 0.4% at $8,454 a tonne as of 1041 […]
By Pratima Desai
LONDON (Reuters) – Copper prices rose on Tuesday as hopes for stronger demand after top consumer China relaxed its COVID-19 quarantine mandates were reinforced by a lower dollar, but worries about global growth capped gains.
Benchmark copper on the London Metal Exchange was up 0.4% at $8,454 a tonne as of 1041 GMT. Prices of the metal, used as a gauge of economic health by investors, touched $8,122.50 a tonne on Friday, the lowest since February 2021.
“China’s hard lockdowns have hit manufacturing activity and industrial metals demand,” said Julius Baer analyst Carsten Menke. “Markets fear economies can’t cope with this mix of high inflation and tightening monetary policy.”
COVID: China will halve to seven days its COVID-19 quarantine period for overseas visitors, with a further three days spent at home.
The country’s state planner said it would roll out tools in its policy reserve in a timely way to cope with economic challenges, boosting sentiment.
Clues to Chinese demand for industrial metals will come later this week from surveys of purchasing managers in the manufacturing sector.
DOLLAR: A lower U.S. currency makes dollar-priced metals cheaper for holders of other currencies, which tends to boost demand. This relationship is used by funds to generate buy and sell signals from numerical models.[FRX/]
GROWTH: Rising inflation and interest rate hikes have fuelled worries about a global economic recession.
SPREADS: Worries about low zinc stocks in LME-registered warehouses have eased. This can be seen in the narrowing premium for the cash over the three-month zinc contract last at $66 a tonne compared with more than $200 a tonne last week.
But zinc availability on the LME market remains a problem as cancelled warrants – material earmarked for delivery – at 77% of the total indicates more metal is due to leave LME warehouses over the coming weeks.
Three-month zinc rose 1.2% to $3,359 a tonne.
OTHER METALS: Aluminium rose 0.7% to $2,513, lead was down 0.1% at $2,002, tin climbed 1.1% to $27,295 and nickel gained 2.8% to $23,530 a tonne.
(Reporting by Pratima Desai; additional reporting by Brijesh Patel in Bengaluru; editing by Vinay Dwivedi)
