Copper prices fell on Wednesday as rising Covid-19 cases in China dampened hopes that demand in the world’s biggest metals consumer would improve soon.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $7,993.50 a tonne at 1128 GMT.
Prices for the metal used in energy and construction rose from about $7,500 in early November to $8,600 on November 14 on hopes that China would ease its economically damaging zero-Covid policy and that interest rates in the United States rise less than is feared.
However, copper has since slumped as Covid infections in China surged and its currency, the yuan, weakened against the dollar, making metals more expensive for Chinese buyers.
Big cities like Beijing, Shanghai and Guangzhou have tightened prevention measures, which could stifle economic activity.
“There could be more than a few false starts for the base metals markets before a sustainable rally really starts to play out.JPMorgan analysts said, adding that they expect prices to average $7,300 in the third quarter of next year.
“After bottoming out in Q2 2023, we believe a more sustained recovery in base metal prices will begin in Q4 2023″, they said. “By then, we expect the Chinese economy and demand for metals will probably be peaking.”.
Among other base metals, aluminum was down 1.3% at $2,397.50 a ton; zinc fell 0.4% to US$2,903.50; nickel was down 0.9% at US$25,800; lead lost 0.3%, to US$ 2,086.50; and tin fell 0.5% to $22,080.
With information from Reuters.