LME copper slips from 6-month high as demand outlook in focus

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Prices of most base metals fell on Tuesday as traders gauged the risks of a global economic downtrend and weak consumption, shedding gains logged in the previous session after top consumer China reopened its borders.

Three-month copper on the London Metal Exchange was down 0.8% at $8,786 a tonne, as of 0422 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange rose 1.3% to 66,490 yuan ($9,823.01) a tonne, tracking overnight gains in London.

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LME aluminum dipped 0.4% to $2,429 a tonne, zinc declined 1.2% to $3,168.50 a tonne, lead fell 1.3% to $2,222 a tonne and tin shed 1.4% to $25,500 a tonne.

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SHFE lead declined 0.6% to 15,480 yuan a tonne, tin was down 0.6% at 204,200 yuan a tonne, while aluminum rose 1.5% to $18,175 a tonne and zinc climbed 1.9% to 23,760 yuan a tonne.

Base metals prices rose strongly on Monday, driven higher by an improving demand outlook after top consumer China reopened its border after years of restrictions due to the COVID-19 pandemic, boosting LME copper to its highest in more than six months.

But fundamentally, the global economy is still at risk of a recession and the U.S. dollar could still firm up even more amid prospects of further interest rate hikes, making greenback-priced metals more expensive to holders of other currencies.

Physical demand of metals is also expected to slow as China is about to enter its week-long holiday break to celebrate the Lunar New Year during Jan. 23-27.

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Yangshan copper premium , which indicates demand for imported copper into China, fell to $37.50 a tonne on Monday, from $152.50 a tonne seen less than three months earlier.

SHFE nickel hit a one-month low of 204,680 yuan a tonne on rising supply worries after Bloomberg reported that nickel producer Tsingshan is looking to boost refined nickel output in China from intermediate forms like ferronickel.

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DATA/EVENTS (GMT)

No major data/events expected on Tuesday, Jan 10

($1 = 6.7688 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips)