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METALS-Copper climbs on China support but COVID clouds demand outlook

reuters.com · 04/29/2022 07:07
METALS-Copper climbs on China support but COVID clouds demand outlook

Updates throughout, adds LONDON dateline

By Zandi Shabalala

- Copper prices rebounded on Friday after top metals consumer China pledged more support for its ailing economy and as the dollar fell from 20-year highs but the metal was still set for its biggest monthly fall since September.

A weaker dollar made greenback-denominated metals cheaper for buyers using other currencies, which increases their attractiveness. FRX/

Meanwhile, the top decision-making body of China's Communist Party said the country would step up policy support to stabilise the economy and offset the impact of lockdowns put in place to slow the spread of COVID-19. nL2N2WR07P

China accounts for about half of global metals demand.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) rose 1.4% to $9,830 per tonne by 1041 GMT. The metal was on track for a monthly percentage fall of more than 5%

"We have some positive news from China's Politburo which pledged more measures to spur economic growth because the economy has been struggling," said ING analyst Wenyu Yao.

The COVID-19 outbreak in top metals consumer China bodes ill for Beijing's economic outlook and metals demand.

More businesses and residential compounds in the capital Beijing closed and authorities ramped up contact tracing to contain its spread. nL3N2WR0GJ

The latest COVID-19 wave is likely to cause a further decline in Chinese factory activity in April, a Reuters poll showed, as extensive lockdowns halted production and disrupted supply chains. nL3N2WQ0ZH

China reports its closely watched factory activity data on Saturday.

INVENTORIES: Copper inventories in LME-approved warehouses have more than doubled since February to 156,050 tonnes. However, stocks are still historically at low levels, analysts have warned. MCUSTX-TOTAL

SUPPLY: Peruvian police evicted indigenous protesters from MMG's MMLTF Las Bambas copper mine for a second day on Thursday, as they disperse a camp set up on company property, an adviser to the community told Reuters.

The mine, which accounts for 2% of global copper supply, has been closed since April 20 and has a long history of disruptions due to community disputes. Southern Copper's mine in Peru is also shut.

ALUMINIUM: Benchmark prices for the light metal CMAL3 were set for their biggest monthly fall in more than 13 years on Chinese demand concerns. On Friday, LME aluminium fell 0.6% to $3,015 a tonne.

OTHER METALS: Zinc CMZN3 added 0.4% to $4,152, lead CMPB3 rose 0.9% to $2,276, tin CMSN3 was up 1.2% to $40,515 while nickel CMNI3 shed 1.1% to $32,600.

(Reporting by Zandi Shabalala; editing by David Evans)


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