Copper steadies, but recession fears dominate mood
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ScrapPrices
Published on June 27,2022 08:00 AM Metals
Copper prices steadied on Monday as sentiment improved after top consumer China eased COVID restrictions and the dollar slipped, but fears of a recession, rising prices and higher interest rates weighed on industrial metals.
Copper steadies, but recession fears dominate mood

LONDON, June 27 (Reuters) - Copper prices steadied on Monday as sentiment improved after top consumer China eased COVID restrictions and the dollar slipped, but fears of a recession, rising prices and higher interest rates weighed on industrial metals.

Benchmark copper on the London Metal Exchange was up 0.3% at $8,404 a tonne at 1605 GMT. Prices of the metal used as a gauge of economic health by investors touched $8,122.50 a tonne on Friday, the lowest since February 2021.

"Copper is supported by optimism around the lifting of COVID-19 restrictions in China," said Giles Coghlan, analyst at broker HYCM. "But it is hard to see whether it will last as it all depends on whether a global recession can be avoided."

COVID: Beijing said it would allow schools to resume in-person classes and Shanghai's top party boss declared victory over COVID-19 after the city reported zero new local cases for the first time in two months.

GROWTH: Soaring inflation, interest rate hikes, expectations of further rate increases and the damage to growth and demand have seen prices of equities and commodities plummet in recent weeks.

INVENTORIES: Copper prices came under pressure after LME data showed a 11,825-tonne jump in stocks to 124,850 tonnes in LME approved warehouses .

ZINC: A small rise in stocks in LME registered warehouses, up 3,175 tonne since last Monday at 81,725 tonne, weighed on prices of the metal used to galvanise steel .

Three-month zinc fell 0.2% to $3,342 a tonne.

Easing concern about supplies on the LME market saw the premium for cash over the three-month zinc contract fall back to $66 a tonne on Monday from above $200 a tonne last week.

But zinc availability on the LME market will remain a problem as cancelled warrants — metal earmarked for delivery — at 78% of the total indicate more metal is due to leave LME warehouses over coming weeks.

DOLLAR: Industrial metals overall were supported by a weaker greenback, which makes dollar-priced commodities cheaper for holders of other currencies. The dollar slipped further after the New York open.

OTHER METALS: Aluminium was up 1.9% at $2,502 a tonne, lead gained 4.2% to $1,996, tin rose 10.3% to $27,125 and nickel climbed 2.2% to $22,900.

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