LONDON, June 27 (Reuters) - Copper prices fell on Monday as fears of a global recession, inflation and higher interest rates dominated the mood, but sentiment was supported by top consumer China relaxing some COVID restrictions.
Benchmark copper on the London Metal Exchange traded 0.3% lower at $8,356 a tonne in official rings. 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.
ZINC: A small rise in stocks in LME registered warehouses, up 3,175 tonne since last Monday to 81,725 tonne, initially weighed on prices of the metal used to galvanise steel .
Easing concern about supplies on the LME market saw the premium for cash over the three-month zinc contract fall back to $70 a tonne 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 the coming weeks.
Three-month zinc rose 0.3% at $3,359 a tonne.
DOLLAR: Industrial metals overall were supported by a weaker greenback, which makes dollar-priced commodities cheaper for holders of other currencies.
OTHER METALS: Aluminium was up 0.9% at $2,479 a tonne, lead gained 3.4% to $1,981, tin rose 9.6% to $26,950 and nickel climbed 4.7% to $23,445.
Reporting by Pratima Desai; additional reporting by Brijesh Patel in Bengaluru; editing by Vinay Dwivedi
Source: Reuters