LME Commentary

 

Three-month copper on the LME benchmark ended 1.3 percent lower at $9,600 a tonne by 1600 GMT. The contract had risen 0.3% on Wednesday. Copper has rebounded about 8 percent since hitting a seven-month low on May 12.

 

When the global epidemic broke out in March 2020, copper prices once fell below $5,000 per ton, and then soared as the global economic recovery and green transition drove demand growth and global supply was insufficient. The Russian-Ukrainian conflict in late February and Western sanctions sparked supply concerns that pushed copper prices to an all-time high of $10,845 a tonne in early March. As the Federal Reserve started the rate hike cycle in March, the growth of major economies such as China slowed down, causing copper prices to fluctuate and fall to a seven-month low of $8,938 on May 13. Prices closed Thursday 11.5% below their all-time peak, though still well above where they were for most of the past decade.

 

The U.S. is to release closely watched inflation data on Friday, which could provide guidance on the Fed's path to rate hikes.

 

The European Central Bank said on Thursday it would raise euro zone interest rates next month for the first time in a decade. Higher interest rates could lead to slower economic growth. A broad decline in financial markets, reflecting weaker investor risk appetite, also weighed on metals markets.

 

Parts of Shanghai's urban districts imposed new restrictions on Thursday, while Beijing's Chaoyang district also temporarily closed entertainment venues as new social infections emerged in both places.

 

The new round of restrictions is targeted and not as extensive as before, said Ms. Fu Xiao, head of commodity sideways at BOC International. But when people see the headlines, their initial reaction is to sell on the recent rally.

 

Fu Xiao said she expected China's economy to recover moderately in the third quarter and trade data was good on Thursday, adding that Chinese port activity also increased significantly.

 

Data showed that China's exports rose at a double-digit rate in May, beating market expectations. That's an encouraging sign for the world's second-largest economy.

 

China's copper imports rose 4.4% in May from a year earlier, customs data showed on Thursday.

 

The most-traded July copper contract in Shanghai closed up 0.2% at 72,810 yuan a tonne.

 

Brazilian miner Vale SA said it had completed a potential study to develop a nickel sulfate business in the Canadian province of Quebec, with an estimated annual production capacity of 25,000 tons.

 

Other metals at the close included LME aluminium down 2.2% at $2,758.50 a tonne, zinc down 1.5% at $3,765 a tonne, nickel down 2.8% at $28,035 a tonne and lead down 2% at $2,188 a tonne On the dollar, tin was down 0.7% at $36,835 a tonne. (over)