Copper set for weekly gain on China demand, but recession fears linger
BEIJING — Copper traded in a tight range on Friday as sentiment cooled due to lingering concerns about a global recession, though the metal was headed for a weekly gain, driven by a weaker dollar and expectations of higher demand from top consumer China.
Three-month copper on the London Metal Exchange was up 0.1% at $9,316.50 a tonne by 0536 GMT, taking its gains to 1.4% for this week and 12% for the month so far.
The most-traded March copper contract on the Shanghai Futures Exchange dipped 0.1% to 70,270 yuan ($10,352.55) a tonne.
Investors bet on a strong recovery in physical demand after the Chinese New Year, while the dollar index hovered around a seven-month low, making the greenback-priced commodity more attractive for those holding other currencies.
“For now, onshore physicals are soft, copper demand is still 10% lower year on year and import arbitrage is negative,” said Zerlina Zeng, a senior research analyst at Fitch Solutions.
“But onshore traders are turning more positive on China’s macro outlook, which supported the relatively strong import flows of copper based on customs imports cleared via Shanghai.”
China imported 347,367 tonnes of refined copper in December, bringing its total imports in 2022 to 3.67 million tonnes, an annual increase of 6.6%, customs data showed.
Data on Thursday showed the U.S. job market remained tight, reinforcing concerns that Federal Reserve would stick to its aggressive interest rate policy that could lead the economy into a recession.
Among other metals, LME aluminum rose 0.3% to $2,594.50 a tonne, zinc slid 0.7% to $3,432, tin nudged 0.4% higher to $28,915, and lead gained 0.3% to $2,149.50.
SHFE nickel rose 3.7% to 219,410 yuan a tonne, aluminum added 0.4% to 19,140 yuan, lead fell 0.5% to 15,220 yuan, zinc climbed 1.1% to 24,650 yuan, and tin was up 0.5% to 231,290 yuan a tonne.
SHFE trading on Friday evening and next week will be closed because of the Lunar New Year holidays.
For the top stories in metals and other news, click or ($1 = 6.7877 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Eileen Soreng and Savio D’Souza)
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