London copper slides as dollar firms, China demand hopes limit losses
BEIJING — Copper prices fell on Wednesday as the dollar firmed amid a downbeat outlook for global economic growth, although the prospect of higher demand from China helped limit losses.
Three-month copper on the London Metal Exchange was down 0.9% at $8,348.50 a tonne by 0713 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange lost 0.7% to 65,440 yuan ($9,378.18) a tonne.
The dollar crept higher as top executives from the biggest U.S. banks warned of an impending recession.
The greenback will rebound against most currencies over the coming months, with the growing threat of recession in the U.S. and elsewhere keeping it firm in 2023 through safe-haven flows, according to market strategists polled by Reuters.
A stronger dollar makes it more expensive for holders of other currencies to buy the greenback-priced commodity.
However, a relaxation in COVID-19 curbs in China raised hopes of better demand and capped losses for the metal. The positive demand outlook was underscored by an increase in China’s copper imports in November.
The country brought in 539,901.70 tonnes of unwrought copper and copper products last month, up 5.8% from a year earlier.
“We expect faster China-demand growth next year, but the developed market demand may contract based on our economists’ view of recession,” said Lynn Zhao, a metal analyst at Macquarie Bank.
London-listed Glencore cut its 2023 production forecast across all the commodities it mines and now expects to produce 1.04 million tonnes of copper next year, down from 1.06 million this year.
Among other metals, LME zinc dropped 1.1% at $3,121 a tonne, aluminum was down 0.8% at $2,489.5 a tonne, tin fell 2.9% to $24,105 a tonne, and lead slid 1.1% to $2,196.50 a tonne.
SHFE aluminum nudged 0.4% down at 19,140 yuan a tonne, zinc climbed 0.4% at 24,610 yuan a tonne, nickel rose 0.4% to 207,650 yuan a tonne, while lead slid 1.1% to 15,770 yuan a tonne.
For the top stories in metals and other news, click or ($1 = 6.9779 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Uttaresh.V, Savio D’Souza and Vinay Dwivedi)
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