By Oyintari Ben
London copper prices dropped on Monday after the previous day saw their greatest increase in over 14 years, as prospects for a resurgence in demand faded after major user China reiterated its tough COVID-19 restrictions to stop outbreaks from spreading.
By 07:16 GMT, three-month copper on the London Metal Exchange was down 1.4% to $7,983 per tonne, 1.8% for aluminium to $2,314 per tonne, 0.9% for zinc to $2,848.50 per tonne, and 1.2% for tin to $18,650 per tonne.
With factory activity being affected by COVID and expanding domestic production, China’s imports of copper fell 1.5% in October from a year earlier. Additionally, China’s commerce unexpectedly declined in October, falling short of expectations.
In response to speculations that China was loosening its zero-COVID regulations, LME copper increased 7.1% on Friday, marking its largest daily increase since January 2009.
According to CRU analyst Craig Lang, low copper stockpiles contributed to the price increase on Friday. He also noted that China’s demand for copper cathode was backed by strong demand from the electric car and renewable energy sectors.
Lang added that it was unclear when the market will be able to return its attention to the longer-term favorable view for copper. “(However), the news flow in the immediate term is going to be negative,” Lang said.
Additionally, a higher dollar increased the cost of greenback-priced commodities for owners of other currencies.
Following advances in overnight trade the day before in London, the most actively traded December copper contract on the Shanghai Futures Exchange increased 3.4% to 65,730 yuan ($9,089.40) per tonne.
Aluminum up 0.4% to 18,275 yuan per tonne and tin increased 5.8% to 166,250 yuan per tonne on the SHFE, but nickel decreased 0.4% to 190,410 yuan per tonne.
