BEIJING — Copper prices drifted lower on Wednesday as COVID-19 flare-ups in China, the world’s biggest metal consumer, sparked fresh concerns over demand, while firmer U.S. dollar also added pressure on greenback-priced metals.
Three-month copper on the London Metal Exchange was down 1.1% at $7,516.50 a tonne, as of 0134 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange dipped 0.1% to 62,230 yuan ($8,686.61) a tonne.
Shanghai and other big Chinese cities, including Shenzhen, have ramped up testing for COVID-19 as infections rise, with some local authorities hastily closing schools, entertainment venues and tourist spots.
The preventive steps come days ahead of a Communist Party congress starting on Oct. 16 where Xi Jinping is expected to extend his leadership.
The International Monetary Fund expected China’s economic growth to contract to 3.2% this year from an 8.1% expansion in 2021, as a result of its strict COVID-19 lockdowns and its worsening property market crisis.
The U.S. dollar gained broadly on Tuesday, adding to recent gains, after a top Bank of England official reiterated that the central bank will end its bond-buying program on Friday and told pension fund managers to finish rebalancing their positions within that time frame.
A firmer U.S. dollar typically weighed down prices as the unit made metals more expensive for buyers holding other currencies to trade. ShFE aluminum lost 0.7% to 18,390 yuan a tonne, nickel fell 2.4% to 179,460 yuan a tonne, while zinc was flat at 24,525 yuan a tonne. LME zinc was unchanged at $2,928 a tonne, aluminum edged down 0.1% to $2,234 a tonne, while tin dipped 0.1% to $20,240 a tonne.
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($1 = 7.1639 Chinese yuan) (Reporting by Siyi Liu and Dominique Patton; Editing by Sherry Jacob-Phillips)