Copper prices declined on Wednesday as concerns over coronavirus lockdowns in Europe pushed up demand for the dollar and dented the global economic recovery progress.
Copper, used widely in construction, manufacturing and power, is often used as a gauge of global economic health.
The U.S. dollar approached a four-month high on Wednesday, making greenback-priced metals more expensive to holders of other currencies.
Three-month copper on the London Metal Exchange fell 0.2% to $8,960.50 a tonne by 0710 GMT, and the most-traded May copper contract on the Shanghai Futures Exchange closed 0.9% lower at 66,480 yuan ($10,192.72) a tonne.
Escalating tensions between China and the West, as well as potential U.S. tax hikes hit sentiment and led to investors buying into safe-haven dollar.
“Renewed restrictions in Europe and other macro news are denting market sentiment,” said ANZ analyst Soni Kumari, adding that Chilean miner Antofagasta avoiding a strike at its Los Pelambres copper mine also pressured prices.
However, copper prices remain sensitive to any mine supply risk and a synchronised economic recovery and green push should provide a broader support for demand despite the ongoing financial tightening in China, Kumari added.
FUNDAMENTALS
* LME nickel fell 0.2% to $16,125 a tonne, zinc dropped 0.7% to $2,819 a tonne while ShFE nickel declined 2% at 120,820 yuan a tonne and ShFE zinc was down 1.8% at 21,635 yuan a tonne.
* LME cash copper was traded at a discount of $1 a tonne to the three-month contract, flipping from a premium since February, as inventories in LME warehouses leaped 65% this month.
* Aluminium premium climbed to a level unseen since May 2018 at $151.91 a tonne in Europe and hit its highest since June 2019 at $409.91 a tonne in the United States.
$1 = 6.5223 yuan
Reporting by Mai Nguyen; Editing by Devika Syamnath and Amy Caren Daniel
Source: Reuters