Wednesday, February 1

Base metals fall on dollar strength, China COVID unrest


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BEIJING — Prices of base metals slid on Monday as the US dollar strengthened, with protests in several Chinese cities against the country’s strict COVID-19 curbs adding to investors’ fears.

Three-month copper on the London Metal Exchange was down 1.6% at $7,879 a tonne, as of 0532 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange shed 1.3% to 64,190 yuan ($8,911.56) a tonne.

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Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China’s stringent COVID curbs flared for a third day and spread to several cities in the wake of a deadly fire in the country’s far west.

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The protests raised worries about management of the virus in the world’s second-largest economy and sent Asian stocks lower on Monday. The protests also led investors towards the safe-haven dollar.

A stronger greenback makes it more expensive for non-dollar holders to buy dollar-priced commodities.

China’s industrial firms saw overall profits decline further in the January-October period as COVID-19 outbreak flared up and cities imposed new virus curbs, including targeted lockdowns, dampening economic activity.

Among other metals, LME aluminum slid 0.9% to $2,342 a tonne, zinc dropped 1% to $2,892.50 a tonne and lead slipped 0.6% to $2,105 a tonne.

The London Metal Exchange (LME) hopes to resume trading of its nickel contract during Asian hours within the next two weeks, an executive said on Monday.

The world’s largest and oldest forum for trading metals, the LME was forced to suspend the nickel market and cancel all trades on March 8, after prices spiked more than 50% to hit a record above $100,000 a tonne within a few hours.

SHFE nickel was down 1.9% at 194,980 yuan a tonne, aluminum dropped 1.2% to 18,675 yuan a tonne, zinc slipped 0.3% to 23,535 yuan a tonne, and tin shed 1.6% to 181,430 yuan a tonne.

For the top stories in metals and other news, click or ($1 = 7.2030 Chinese yuan) (Reporting by Beijing Newsroom; Editing by Subhranshu Sahu and Uttaresh.V)



financialpost.com