Copper price rebounds on weak dollar and COVID-19 outbreaks in China limit gains

Copper was rebounding on Tuesday after four sessions of losses on the back of a weaker dollar, but rising COVID-19 cases in top metals consumer China limited gains.

Three-month copper on the London Metal Exchange was up 1.9% at $8,033 a tonne as of 10:35 GMT. It is down 7% since hitting a five-month high on November 14.

The dollar index was down from a high in more than a week against its rivals, making greenback-traded metals less expensive for buyers holding other currencies.

The downward correction in copper in recent days had been largely driven by concerns about possible pandemic-related lockdowns in China, which would curb demand for metals, forcing bullish investors to trim their positions, it said Ole Hansen, head of commodities at Saxo Bank in Copenhagen.

The Chinese capital, Beijing, closed parks and museums on Tuesday and imposed new testing requirements to enter public places such as shopping malls and hotels, as COVID-19 cases rose.

The December copper contract on the Shanghai Futures Exchange ended the day down 1.1% at 64,410 yuan ($8,996.06) a tonne.

BHP said on Monday it reached an agreement with a workers’ union to avoid a planned strike at Chile’s Escondida mine, the world’s biggest copper mine.

Among other industrial metals, LME aluminum was up 1.7% at $2,420.50 a tonne, nickel was up 2.1% at $25,500, zinc was up 0.8% at $2,930, lead added 0.9% to US$2,119.50 and tin rose 1.1% to US$21,400.

With information from Reuters.