Copper retreats as China COVID worries dampen stimulus hopes

Copper retreated in London on Friday and was on track for its fifth straight weekly loss, as worries about COVID-19 curbs in China outweighed hopes for stimulus for the top metals consumer.

Three-month copper on the London Metal Exchange fell 0.5% to $7,780 a tonne by 0428 GMT.

On the Shanghai Futures Exchange, the most-traded August copper contract ended morning trade 1.2% higher at 58,940 yuan ($8,787.83) a tonne, off a session high of 60,540 yuan.

Copper rose sharply on Thursday following a Bloomberg News report saying China was considering allowing local governments to sell $220 billion of special bonds in the second half of this year to boost infrastructure funding.

“While Chinese policymakers are considering boosting stimulus, the headwind from COVID-19 restrictions remain given China is still running a zero-COVID policy,” said National Australia Bank economist Tapas Strickland.

COVID-19 curbs are likely to slow the pace of infrastructure projects, analysts said.

LME copper was so far down more than 3% this week as heightened concerns over a global recession dampening metals demand weighed on markets.

CHINA: China’s economy is rebounding but more efforts were needed to support the recovery, Premier Li Keqiang was quoted by state media as saying on Thursday.

CODELCO: Chile’s state-owned Codelco, the world’s largest copper producer, will begin construction on a long-delayed $1 billion desalination plant this year to supply its largest operations in northern Chile.

SHANGHAI: Shanghai reopened most cinemas on Friday, sticking to a plan of gradual resumption of daily activities after it lifted a two-month COVID-19 lockdown in June.

PRICES: LME aluminium fell 0.3% to $2,435 a tonne, zinc shed 0.4% to $3,097.50, lead slumped 1.7% to $1,938.50 and tin dropped 1.9% to $25,500.

Shanghai aluminium rose 0.8%, zinc climbed 1.8%, but nickel fell 1.5%, lead dipped 1.2%, while tin was up 0.2%.

($1 = 6.7070 Chinese yuan)


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