BY ONOME AMUGE
Copper edged lower as it stumbled to its third consecutive weekly decline over concern that rapid monetary tightening and Covid restrictions in China will depress economic growth and demand for the red metal.
As a result, benchmark three-month copper on the London Metal Exchange (LME) was down 0.5 percent to $10,234 a tonne.
Commenting on the bearish form of the metal,Wenyu Yao, senior commodities strategist at ING Bank, said multiple factors weighed on copper and the other metals, particularly from the macro side, such as increasing worries about a potential recession in the United States and Covid lockdowns in China, the world’s largest metal consumer.
“Initially it was going to be a snap lockdown in Shanghai, but it’s over a month now and nobody knows when it will end. That’s another big worry,” Yao added.
According to market reports, industrial output in Shanghai, China’s most populous city, plunged in March to record its first monthly decline in two years after stringent lockdown measures halted production in some factories.
Rising copper inventories in LME-approved warehouses also beat down prices, with the total having gained 72 percent over the past month.
Weighing further on the copper market is a report that a group of indigenous communities in Peru, the world’s leading copper producer, had ended a protest against Southern Copper Corp Cuajone mine, following the forceful suspension of production for over 50 days.
Elsewhere, aluminium slipped 1.2 percent to $3,259 a tonne, nickel was little changed at $33,900 a tonne, lead declined 0.1 percent to $2,399 a tonne, while tin lost 2.6 percent to $41,750 a tonne.
On the other hand, zinc rebounded following a drop in on-warrant LME stocks by 25 percent to 33,975 tonnes, its lowest level since November 2019.