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Copper heads for weekly decline on fears of economic slowdown

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NEW DELHI/BEIJING — Copper prices edged higher on Friday but were on track for weekly losses as fears of surging COVID-19 infections in top consumer China and interest rate hikes by major central banks fueled fears of an economic slowdown.

Three-month copper on the London Metal Exchange was up 0.86% at $8,364.50 a tonne by 0249 GMT. It has declined 2% so far this week from a five-month high of $8,543 last Friday.

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The most-traded January copper contract on the Shanghai Futures Exchange was down 0.86% at 65,440 yuan ($9,394.74) a tonne.

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“As we approach the end of the year (enter the New Year), we believe the single largest unknown in the market is going to be the recovery timeline of China,” said Natalie Scott-Gray, a senior metals analyst, market analysis, EMEA & Asia at StoneX Financial Ltd.

China raced to vaccinate its most vulnerable people on Thursday in anticipation of more waves of COVID-19 infections, with some analysts expecting the death toll to soar after the country eased strict controls that had kept the pandemic at bay for three years.

“The current surge in COVID-19 cases raises the prospect of the weakness persisting into December and early 2023,” ANZ Research said in a note.

The U.S. Federal Reserve raised interest rates by 50 basis points on Wednesday and forecast more increases next year. The European Central Bank and the Bank of England also raised rates on Thursday and both indicated more hikes were likely.

Among other metals, LME aluminum was up 0.8% at $2,403 a tonne, zinc edged higher by 0.3% to $3,170, and lead was up 0.26% to $2,158.50.

SHFE aluminum fell 0.11% to 18,765 yuan a tonne, tin dropped 0.7% to 192,110 yuan, zinc dipped 0.96% to 24,215 yuan, nickel was flat at 217,100 yuan, and lead was up 0.26% at 15,520 yuan.

For the top stories in metals and other news, click or ($1 = 6.9656 Chinese yuan) (Reporting by Neha Arora in New Delhi and Siyi Liu in Beijing; Editing by Savio D’Souza)

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