Copper price rises on drop in COVID-19 cases in China, demand remains at risk

Copper prices rose on Wednesday as a slowdown in COVID-19 infections in China, the world’s top metals consumer, eased concerns about short-term demand, although persistent restrictions capped enthusiasm.

Shanghai said half the city had achieved “zero COVID” status, but unbending restrictions were to remain in place under national policy.

Lockdowns in China and concerns about aggressive US interest rate hikes this year have weighed on base metals, with copper hitting its lowest level in nearly five months this week.

Beijing’s reluctance to inject economic stimulus to boost demand will continue to weigh on metals, said Caroline Bain, senior commodity economist at Capital Economics.

“The lockdowns in China have been the final nail in the coffin for demand. It has highlighted how weak demand has been,” Bain said.

Benchmark copper on the London Metal Exchange (LME) was up 1.4% at $9,359 a tonne by 1043 GMT.

China’s copper cathode output in April fell on both a monthly and annual basis, state-backed research house Antaike said on Tuesday, as maintenance and COVID-19 outbreaks prevented smelters from producing. more metal.

Inflation in China’s factories fell to its lowest level in a year in April, giving authorities room to apply more stimulus to prop up a weakened economy.

The dollar, at its highest level in two decades, makes metals and other assets traded on the greenback more expensive for buyers with other currencies.

Among other industrial metals, aluminum on the London Metal Exchange (LME) rose 0.5% to US$2,769 a tonne, zinc gained 1.3% to US$3,645, lead was stable at US$2,112, tin It was little changed at $35,530, while nickel fell 2% to $27,835.