Copper eases as traders reassess China demand recovery bets

COPPER PRICES fell on Monday as tepid physical demand prompted traders to reassess how quickly and strongly buying would pick up in top consumer China after the country dismantled its zeroCOVID policy last month.

The most-traded March copper contract on the Shanghai Futures Exchange fell 0.6% to 69,750 yuan ($10,325.38) a ton by 0428 GMT as trading resumed after a week-long Lunar New Year holiday, while three-month copper on the London Metal Exchange (LME) was almost unchanged at $9,263 a ton.

Copper prices have risen 11% so far this year in London and 5.5% in Shanghai, underpinned by hopes that consumption of the metal in China would rebound following the removal of coronavirus disease 2019 restrictions.

However, physical demand remained tepid prior to the Lunar New Year holiday, which ended on Jan. 27, as shown by falling premiums. On Friday, LME copper registered its first weekly fall since mid-December 2022.

Meanwhile, a weaker dollar and supply threats in Peru, the world’s second biggest supplier of mined copper, provided some support to copper prices on Monday.

Chinese copper miner MMG Ltd said its Las Bambas mine in Peru would likely have to halt production from Feb. 1 due to a shortage of “critical supplies” leading to a slowdown of operations.

LME aluminum fell 0.5% to $2,614.50 a ton; and tin dropped 2.7% to $30,000 a ton; while lead rose 0.1% to $2,184.50 a ton. ShFE nickel rose 2.9% to 220,380 yuan a ton; and tin jumped 2.7% to 238,280 yuan a ton; while aluminum fell 1% to 18,930 yuan a ton; and zinc shed 1.9% to 24,135 yuan a ton.

LME cash zinc was at a $25.25 per-ton premium over the threemonth contract, the highest in more than three weeks, as inventories fell to 17,675 tons, the lowest since at least 1998, based on Refinitiv Eikon data. —