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London copper eases ahead of ECB meeting; demand recovery hopes support


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London copper prices crept lower on Thursday ahead of a monetary policy decision by the European Central Bank, although better-than-expected economic data out of top consumer China raised hopes of a demand recovery amid declining inventories.

Three-month copper on the London Metal Exchange was down 0.3% at $9,697 a tonne, as of 0518 GMT.

The most-traded July copper contract in Shanghai was up 0.1% at 72,800 yuan ($10,885.39) a tonne by the midday break.

“We expect copper to rebound a bit later in he day. Its just that ahead of ECB outcome the copper market is muted,” said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares.

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Speculation is growing that red-hot euro zone inflation could push the ECB into kicking off its hike campaign with a large 50 basis point rate increase at its policy meeting later in the day.

Data showed China’s exports grew at a double-digit pace in May and twice as fast as expected as factories resumed production and logistics snags eased after authorities relaxed some COVID curbs in Shanghai.

Meanwhile, parts of Shanghai began imposing new lockdown restrictions on Thursday, with residents of sprawling Minhang district forced to stay home for two days in a bid to control COVID-19 transmission risks.

“We don’t expect extended lockdown to hurt the sentiment. Market may shrug it off. Copper may rise to $9,850/tonne and supply concerns may provide a floor in the near-term,” Trivedi said.

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INVENTORIES: Copper stocks in LME warehouses fell by 3,875 tonnes to 116,900 tonnes , the lowest since April 13.

NICKEL: A hedge fund association has complained to the LME about the suspension of the nickel market and cancellation of nickel trades in March saying the exchange failed to meet its regulatory obligations.

SMELTERS: Chilean state-owned Codelco, the world’s largest copper producer, said on Wednesday that it stopped its Ventanas smelter and refinery to carry out maintenance after authorities declared an environmental emergency in the region.

PRICES: LME aluminum rose 0.9% to $2,843 a tonne, zinc eased 0.3% to $3,812, lead eased 0.6% to $2,219, and tin fell 1.5% to $36,560.

Shanghai aluminum added 0.4%, zinc was up 1.2%, nickel eased 0.2%, lead edged 0.1% higher, and tin jumped 3.3%.

(Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V)

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