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METALS-Copper drops as partial lockdowns return in China

reuters.com · 06/09/2022 06:14
METALS-Copper drops as partial lockdowns return in China

Updates prices, adds ECB meeting

By Eric Onstad

- Copper prices declined on Thursday as the re-imposition of some lockdown restrictions in China fuelled fresh worries about demand in the world's top metals consumer.

Three-month copper on the London Metal Exchange CMCU3 slipped 1.2% to $9,618 a tonne by 1435 GMT after rising by 0.3% on Wednesday.

Shanghai and Beijing went back on fresh COVID-19 alert after parts of China's largest economic hub started imposing new lockdown restrictions while the most populous district in the Chinese capital shut entertainment venues. nL1N2XW01L

"The latest round of restrictions are targeted, they're not as widespread as previously, but when people see the headlines, the initial reaction would be to sell the rallies we had recently," said Xiao Fu, head of commodity market strategy at Bank of China International.

LME copper has bounced about 8% after touching seven-month lows on May 12.

Xiao expects a moderate economic recovery in China in the third quarter and pointed to Thursday's positive trade data and said port activity in China had also increased substantially.

China's exports grew at a double-digit pace in May, data showed, shattering expectations in an encouraging sign for the world's second-biggest economy. nL4N2XV0UF

The most-traded July copper contract in Shanghai SCFcv1 ended daytime trading up 0.2% at 72,810 yuan ($10,896.44) a tonne.

Metals were also hit by gloomy sentiment in wider financial markets after the European Central Bank signalled it would hike euro zone interest rates next month for the first time in a decade. MKTS/GLOB nL1N2XW0AB

* China's May copper imports rose 4.4% from the same month a year earlier, data showed. nL1N2XW0H1

* Brazilian miner Vale SA VALE said it had completed studies for potentially developing a nickel sulfate operation in Quebec, Canada, with annual capacity seen at 25,000 tonnes. nL1N2XW11Z

* LME aluminium CMAL3 shed 1.9% to $2,765 a tonne, zinc CMZN3 fell 1.7% to $3,756, nickel CMNI3 lost 2.7% to $28,075, lead CMPB3 fell 2% to $2,187, and tin CMSN3 eased 1.6% to $36,515.

($1 = 6.6820 Chinese yuan)

(Reporting by Eric Onstad; Editing by Aditya Soni)

((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))

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