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LONDON — Copper prices slid to near two-week lows on Monday, pressured by fresh COVID curbs in top consumer China, a stronger dollar and rising inventories in warehouses registered with the London Metal Exchange.
Benchmark copper on the LME traded down 1.7% at $7,938 a tonne in official rings, from an earlier $7,930, the lowest since Nov. 8.
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Beijing’s most populous district urged residents to stay at home on Monday, while the capital reported an increase in COVID-19 cases. Local authorities in the southern Chinese city of Guangzhou locked down the area for five days.
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“Hopes of a rapid reopening in China have been disappointed,” said Julius Baer analyst Carsten Menke.
“The elephant in the room is the property market. I don’t buy that because people don’t have to quarantine anymore, they will go out and buy homes, confidence has been badly shaken.”
Property and construction account for a large part of copper consumption in China.
A recent Reuters survey showed China’s property sector will remain weak but see a gradual recovery in 2023, while prices of new homes are expected to fall in the first half of next year.
Copper stocks
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Easing concerns about LME copper supplies have created a discount for the cash over the three-month contract
The higher U.S. currency weighed on industrial metals overall as it makes dollar-priced commodities more expensive for holders of other currencies.
Aluminum slid 2.6% to $2,366 a tonne, zinc lost 3% to $2,939, lead was down 1.3% to $2,130 and nickel fell 3% to $24,600.
Tin was down 4.9% at $21,550 a tonne.
“Production has strongly recovered this year and tin is exposed to a further slowdown in consumer goods spending as ex-China economic activity deteriorates,” said Citi analyst Tom Mulqueen.
Citi expects tin prices to fall to $18,000 a tonne over the next three months. (Reporting by Pratima Desai; additional reporting by Brijesh Patel in Bengaluru; editing by Devika Syamnath and Jason Neely)