METALS-Copper hits two-week high on easing China COVID controls

By Reuters / December 28, 2022 / / Article Link

(Updates prices, adds Port Pirie ramp up) By Pratima Desai LONDON, Dec 28 (Reuters) - Copper prices hit a two-weekpeak on Wednesday as top consumer China's easing of COVIDrestrictions spurred buying, but recession risks andexpectations of weaker demand capped gains. Benchmark copper on the London Metal Exchange (LME)was up 1.1% at $8,444 a tonne at 1705 GMT after touching itshighest since Dec. 14 at $8,520. China will stop requiring inbound travellers to go intoquarantine from Jan. 8 in a major step towards easing curbs onits borders that have been largely shut since 2020. "The relaxation of China's zero-COVID restrictions havelifted the market mood much more than they will lift demand, andthe property market is unlikely to see a rapid recovery," saidJulius Baer analyst Carsten Menke. "Growth elsewhere should not be strong enough to offsetChina's softness, suggesting that 2023 will be anothercyclically challenging year for copper and industrial metalsmore broadly." Spikes in China's COVID-19 cases and the Lunar New Yearholiday next month are expected to dampen metals demand, thoughsupply concerns could lend some support.

Attention is also focused on a dispute over taxes betweenPanama's government and First Quantum Minerals . Thecompany's Cobre Panama mine produced 331,000 tonnes of copperlast year. Elsewhere, lead prices hit $2,302.50 a tonne, their highest since May 5, on worries about supplies and dwindlingstocks of the battery material in LME-approved warehouses, whichare near 15-year lows at 25,000 tonnes. Cancelled warrants - metal earmarked for delivery - at 39%of the total and large holdings of warrants andcash contracts suggest more lead is due to bedelivered out. The scramble for lead has also created a hefty premium forthe cash contract over the three-month lead contract. Thepremium was last at $46.75 a tonne, near a one-year high hit onFriday. However, three-month lead was last down 3.6% at $2,191 atonne after Nyrstar said its Port Pirie lead smelter was rampingup production after completion of a project to improveefficiency. In other metals, aluminium slipped 0.3% to $2,382,zinc gained 1.5% to $3,010, tin jumped 4.1% to$24,905 and nickel was up 2.8% at $30,375. (Reporting by Pratima DesaiEditing by Barbara Lewis and David Goodman)

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