Copper down on rising COVID cases in China and dollar firmness

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Prices for copper and aluminum fell on Thursday, weighed down by the new restrictions on production generated by the coronavirus in China, the world’s main consumer of metals, the firmness of the dollar, and the increase in aluminum inventories.

At 1000 GMT, three-month copper on the London Metal Exchange (LME) was down 1.5 percent at $7,676 a tonne, after rising 3.6 percent on Wednesday.

“People were starting to be a little bullish yesterday with adjusted copper stocks, but it was exaggerated and also the dollar is stronger today, so the market is pulling back,” said Robert Montefusco of Sucden Financial.

Copper inventories available at the LME, those not destined for delivery, have fallen 68% in the last three weeks.

Copper prices on the LME have plunged 21% so far this year, weighed down by concerns about a global recession and strict COVID-19 lockdowns in China that have slowed growth.

On Thursday, China reported a third straight day of more than a thousand new COVID cases nationwide, prompting cities from Wuhan in the center to Xining in the northwest to step up restrictions.

The firmness of the Dollar Index It also weighed on the market, making metals quoted in the U.S. currency more expensive for buyers using other currencies.

In other base metals, aluminium on the LME fell 1.7% to $2,295.50 a tonne, after rising as much as 5.4% the day before; the zinc it rose 0.5 per cent to $2,963.50; tin gained 0.6 percent to $18,795; the nickel yielded 1.9 per cent to $22,235; and lead was down 0.1% at $1,888.50.

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