By Onome Amuge
Copper prices maintained an upward motion, underpinned by a weaker US dollar, though they ended the week with little gains as investors weighed up tight market fundamentals against China’s COVID-19 outbreaks.
Three-month copper on the London Metal Exchange (LME) was up 0.4 percent at $8,075 a tonne by the close of the week, little changed from the $8,076-a-tonne closing price recorded a week prior. The most-traded December copper contract on the Shanghai Futures Exchange (SHFE) also moved in a similar motion, gaining 0.4 percent to 65,240 yuan or $9,113.64 a tonne for the week.
Analysts explained that the dollar plunged to yet another weekly loss and edged closer to a three-month low as investors weighed the prospect of the Federal Reserve slowing US interest rate hikes as soon as “December” dominated investors’ minds and kept the mood buoyant. This is further backed by the fact that a weaker US currency supports metals prices by making it cheaper for non-dollar holders to buy greenback-priced commodities.
China’s recent report of another record high of daily COVID-19 infections further hurt demand and utilisation of copper among other metals, with cities across the country enforcing measures and curbs to control outbreaks.
In the Shanghai market, aluminium slipped 0.3 percent to 18,925 yuan a tonne, zinc added 0.5 percent to 23,820 yuan a tonne, tin gained 0.8 percent to 183,720 yuan a tonne, while nickel advanced 0.5 percent to 200,160 yuan a tonne.
Gianclaudio Torlizzi at consultants T-Commodity opines that the copper market is “building a bottom”, predicting further that the red metal would head towards $9,000 a tonne.
According to him, investors were too negative on the outlook for copper consumption and inventories were so low that copper does not need a big increase in demand to push prices up.
Among other metals on the LME, aluminium was up 0.9 percent to $2,389 a tonne, zinc advanced 0.6 percent to $2,936 a tonne, but lead was down 0.4 percent to $2,122.5 a tonne.