Shanghai metals fall as COVID surge in China unsettles traders
Prices of metals in Shanghai declined on Tuesday as the rapid spread of coronavirus infections and contracting factory activities in top consumer China heightened traders’ concerns of tepid demand.
The most-traded February copper contract on the Shanghai Futures Exchange was down 0.7% at 65,670 yuan ($9,540.20) a tonne, as of 0319 GMT, aluminum dropped 2.7% to 18,175 yuan a tonne and zinc shed 1.8% to 23,290 yuan a tonne.
SHFE nickel was down 0.8% at 227,500 yuan a tonne, tin decreased 0.4% to 208,320 yuan a tonne and lead fell 0.5% to 15,850 yuan a tonne.
China’s official purchasing managers’ index (PMI) showed factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years as COVID-19 infections swept through production lines across the country.
The private Caixin survey, believed to focus on smaller, export-oriented firms compared with the larger official PMI survey, also showed factory activity shrank at a sharper pace in December after Beijing’s abrupt reversal of anti-virus measures.
The industrial metals markets might not see improving demand and a price rally in the next few months as the headwinds of slow growth will likely dominate the economic landscape for some time.
Nonetheless, the dropping of China’s stringent “zero-COVID” measures still sparked some hopes for better economic activities in the world’s biggest metals consuming market.
Three-month copper on the London Metal Exchange rose 1.3% to $8,478.50 a tonne, reversing two sessions of losses.
LME aluminum increased 0.7% to $2,394 a tonne, tin advanced 2% to $25,300 a tonne, zinc was up 0.5% at $2,986 a tonne, while lead declined 1.5% to $2,258.50 a tonne.
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($1 = 6.8835 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips)
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