Copper snaps two-day rally as China COVID fears loom
NEW DELHI — Copper prices fell on Thursday after two straight sessions of gains, as easing COVID-19 curbs in top consumer China raised fears of an infection spike, weighing on the demand outlook.
Three-month copper on the London Metal Exchange was down 0.95% to $8,435.50 a tonne by 0312 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange fell 0.92% to 65,910 yuan ($9,471.05) a tonne.
In the last two sessions, the market had rallied on the back of a weaker dollar amid expectation of a slower pace of interest rate hikes by the U.S. Federal Reserve.
The Fed raised its interest rate by an expected 50 basis points on Wednesday, but struck a hawkish tone, indicating rates would remain higher until next year.
China began shifting away from its “zero COVID” policy just this month, after rare protests against the economically damaging curbs that had been championed by President Xi Jinping. The relaxation has spurred concerns about a surge in COVID cases.
Meanwhile, in Chile, the world’s largest copper producer, state-owned Chilean Copper Commission (Cochilco) on Wednesday cut its 2023 price forecast to $3.70 per pound due to higher supply.
In Peru, the world’s no. 2 producer, a wave of political protests related to the ouster of its former leader affected supply routes to key copper mines in the Andean nation, raising a potential risk to production.
Among other metals, LME aluminum was down 0.12% at $2,441 a tonne, zinc fell 0.57% to $3,220, and lead weakened 0.44% to $2,171.50.
SHFE aluminum fell 0.11% to 18,780 yuan a tonne, tin dropped 1.22% to 193,990 yuan, zinc dipped 1.79% to 24,380 yuan, nickel fell 1.24% to 216,700 yuan, and lead was down 0.39% at 15,490 yuan.
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($1 = 6.9591 Chinese yuan) (Reporting by Neha Arora; Editing by Subhranshu Sahu)
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