Due to low inventories, copper prices increased a little bit on Tuesday, although gains were restrain by China’s desire to uphold its stringent zero-COVID policy. As of 0755 GMT, the most traded December copper contract on the (SHFE) Shanghai Futures Exchange was up by 0.3% at 65,780 yuan ($9,061.11) a metric tonl.
While the 3 month copper contract on the (LME) London Metal Exchange was up 0.2% at $7.931 per metric ton.
In anticipation of China easing its rigorous COVID-19 limitations. Which might increase metals demand, London copper prices rose 7.3% last week, their strongest weekly rise since March. While Shanghai Futures Exchange copper reached its highest level since June 20 on Monday.
Low Inventories
Low stocks in global warehouses, particularly in China, wherein stockpiles in SHFE & bonded warehouses together were at 84,164 metric tons. Hanging around their record low of 72,159 metric tons reached in October, contributed to the price hike.
Metals prices fell, though, as Chinese authorities maintained their support for strong regulations to stop coronavirus outbreaks.
According to a report by Jinrui Futures, “during the weekend, assumptions that the anti-epidemic policies will be liberalised fell short. As well as the price has fallen in a limited way to repair the highly optimistic expectations.“
“The overall level of price fluctuation for copper has greatly increased recently. Short-term orders should be purchased when needed, while long-term strategic inventory reserves should be avoided for the time being .”
Metal prices declines; China sticks to NET-ZERO COVID Restrictions
On Monday, China’s weak economic figures contributed to a general decline in risk sentiment and metals demand. While a stronger dollar made commodities priced in other currencies more costly for holders among those currencies.
LME lead decreased 1.1% to $2,014 per tonne, zinc decreased 0.6% to $2,869 per tonne. And tin increased 1.7% to $19,255 per tonne. Aluminium down 0.1% to $2,334 per tonne.
A tonne of SHFE tin increased by 1.4% to 167,700 yuan, while nickel decreased by 0.4% to 192,190 yuan, aluminium increased by 0.6% to 18,450 yuan, and zinc increased by just 0.2% to 23,715 yuan.