Base metals broadly rose on Tuesday, supported by clues that top consumer China will further ease its COVID-19 restrictions, although trading volumes were tepid as markets weighed the risk of monetary tightening by the US Federal Reserve.
Three-month copper on the London Metal Exchange advanced 0.8% to $7,814 a tonne by 0559 GMT, and the most-traded October copper contract on the Shanghai Futures Exchange increased 0.2% to 62,720 yuan ($8,945.05) a tonne.
LME zinc rose 0.5% to $3,156.50 a tonne, aluminum was up 0.5% at $2,262.50 a tonne and ShFE nickel climbed 1.4% to 196,000 yuan a tonne, while ShFE aluminum fell 0.5% to 18,765 yuan a tonne.
China, the world’s biggest consumer of metals, is starting to ease some strict COVID-19 regulations that had hurt economic growth and metals demand in the country.
Local authorities of the southwestern Chinese city of Chengdu announced plans to resume production and life “in an orderly manner” from Monday following more than two weeks of lockdowns and other strict curbs.
Hong Kong, which takes its cues from China’s COVID-19 policy, is also expected to move toward an orderly reopening in a bid to keep the city connected with the rest of the world.
“There’s more pressure on China to relax its zero-COVID policies, as more angst is arising amongst the general public,” a trader said, adding that market was quiet ahead of the Fed meeting on interest rates during Sept. 20-21.
The US central bank is expected to hike rates aggressively in an effort to curb inflation, which in turn would strengthen the dollar and make greenback-priced metals more expensive to holders of other currencies.
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($1 = 7.0117 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Devika Syamnath and Sherry Jacob-Phillips)