LONDON: Copper prices rebounded on Friday, snapping three days of losses on a weaker dollar and hopes for a recovery in China, the metals’ top consumer, from the harsh COVID shutdowns.
Three-month copper on the London Metal Exchange gained 1% to $9,450 a tonne at 0950 GMT, after falling around 2% in the past three sessions.
July’s most-traded copper contract on the Shanghai Futures Exchange ended day trade up 1% at 71,900 yuan ($10,677.64) a tonne.
Shanghai took more gradual steps on Friday to lift its COVID-19 lockdown as Chinese stocks gained on hopes of additional stimulus.
Caroline Bain, chief commodities economist at Capital Economics, feared that China was offering a huge boost to its economy.
“The Chinese authorities are acting very cautiously when it comes to stimulus. I think things will have to get a little bit worse (to see a major stimulus),” Bain said.
Copper falls as investors fear a global economic slowdown
While China’s COVID-related restrictions will likely be lifted in the coming months, developed economies are expected to see weaker growth, Bain said.
“The combination of subdued growth in China and a slowdown in the United States and Europe means that prices need to come down further,” she said, adding that her year-end price target for copper was $9,000.
Support for the metals market was a weaker dollar index, which fell to a one-month low as traders lowered expectations of a Federal Reserve rate hike. A weaker greenback makes metals valued in dollars cheaper for holders of other currencies.
Workers at Russian aluminum giant Rusal’s Guinean bauxite mine, Compagnie des Bauxites de Dian-Dian, went on strike on Thursday, which Rusal called illegal.
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LME aluminum rose 0.6% to $2,882 a tonne, zinc climbed 1.8% to $3,801.50, lead added 0.4% to $2,136.50, l pewter rose 0.8% to $33,905 and nickel jumped 3.9% to $28,250.