Copper prices fell on Tuesday as industrial activity in China was affected by rising COVID-19 infections and concerns were raised about the near-term demand prospects. Although losses were limited by a weakening U.S. dollar.
By 1315 GMT, the price of three-month copper on the London Metal Exchange (LME) had decreased 0.2% to $8299 per metric ton, reversing gains from previous session. That power by China’s promise to expand its economy.
However, the world’s largest consumer of metals is currently dealing with a wave of escalating infections as a result of relaxing COVID restrictions. Which, according to market participants, had an impact on Chinese industrial supply chain operations as well as logistics capacity.
China recorded five additional COVID-19 deaths on December 19. Up from two the day before, bringing the total number of fatalities in the country to 5,242. According to Tuesday’s National Health Commission report.
China’s Economy Struggles as Supply Chain Interrupted
As economy struggles, prices are dropping, according to a futures trader in Beijing.
“As more workers become affected, the entire supply chain is interrupt.”
According to a study released on Monday by World Economics. China’s business confidence has reached a level not seen in over a decade. This decline is due to the rapid relaxation of numerous pandemic control measures. As well as the impact of the country’s rising COVID-19 cases upon economic activity.
On the Shanghai Futures Exchange, the most actively traded January copper Prices contract fell 0.4% at 65.070 yuan ($9.319.72) per tonne.
The yen surged to a four-month high as the dollar index dipped 0.4% after the Bank of Japan (BOJ) announced it will review its policy for controlling the yield curve. A declining dollar increases the commodity’s appeal to non-dollar buyers.
A fourth consecutive decline on Wall Street on Monday reflected the risk-off mentality. That pervaded risk asset markets around the world at the start of what will likely be a low volume, pre-holiday week.
Other metals included LME lead, which nudged down 0.2% to $2,155.50, zinc. Which fell 0.1% to $3,009, and tin, which rose 1.2% to $23,575.