Aluminum and copper prices fall due to concerns about cases of COVID-19 in China

Aluminum, copper and other industrial metal prices fell on Wednesday on concern over rising COVID-19 cases in China, the top metals consumer, after it loosened its stringent controls to curb the spread of the disease.

Three-month aluminum on the London Metal Exchange (LME) was down 1% at $2,436.50 a tonne at 1120 GMT, after gaining 2% in the previous session.

Meanwhile, LME copper was down 0.1% at $8,487 a tonne, after hitting its highest since June 23 on Tuesday.

“The situation in China regarding COVID is still quite confusingsaid Geordie Wilkes, head of research at Sucden Financial. “It’s getting clearer in terms of its approach (…) but what we’re seeing is a sharp divergence between confidence and actual fundamentals on the ground”.

A week after China began to roll back its strict “zero COVID” controls, the World Health Organization warned of “very hard” times ahead and state media reported some critically ill patients in Beijing hospitals, which raises fears of a wave of infections.

Investors were also nervous ahead of the US Federal Reserve meeting, which is expected to slow the pace of interest rate hikes.

“There are still big clouds over the market. Whether the market is fully embracing monetary policy tightening and whether there is a prospect of stagflation remains to be seen.Wilkes said.

Losses were cushioned by a lower dollar index, after weaker-than-expected US inflation data made US-denominated commodities cheaper for buyers using other currencies. .

In other metals, nickel was down 0.4% at $28,180 a tonne; zinc fell 1.5% to US$3,269.50; lead fell 2% to $2,162.50; and tin was down 1% at $24,400.

With information from Reuters