Wednesday, July 6

Copper, aluminum rebound as dollar rally pauses; growth fears cap gains


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London copper and aluminum prices

rebounded on Tuesday, helped by a slight pullback in the US

dollar, although a spike in COVID-19 cases in Beijing and global

slowdown worries weighed on investor sentiment.

Three-month copper on the London Metal Exchange rose

0.8% to $9,365.50 a tonne, as of 0705 GMT, while aluminum

was up 0.3% at $2,635, after hitting its lowest since

Dec. 15 on Monday.

The most-traded July aluminum contract in Shanghai

ended daytime trading 1% lower at 20,005 yuan ($2,976.93) a

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tonne, after falling to its lowest since May 11 earlier in the

session.

Offering some respite, the dollar rally stalled as

the US currency fell 0.2% against its rivals, making

greenback-denominated metals less expensive for buyers using

other currencies.

“Concerns of weaker economic growth as central banks hike

commodity rates weighed on sentiment in the base metals market,” commodity rates

strategists at ANZ said in a note.

“Following the easing of some restrictions in recent weeks,

the market was reminded of the rollercoaster ride it is on when

authorities in Shanghai sealed a district for mass testing.

These little outbreaks of COVID-19 could hinder the economic

recovery and weigh on demand.”

Beijing’s authorities have launched an investigation into a

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24-hour bar that they believe to be at the center of a cluster

of more than 250 COVID-19 cases in China’s capital since last

week, local media reported on Tuesday.

Rising expectations that the US Federal Reserve will this

week raise interest rates by more than previously forecast

unsettled investors.

* Lead surpluses in top consumer China will cancel out

shortages of the battery material in Europe and the United

States, effectively leaving the global market in balance this

year.

* Ghana is on a roadshow to find a strategic partner to

rebuild state-owned Volta Aluminium Co’s aluminum smelter.

OTHER METALS: LME zinc rose 0.9% to $3,646.50 a

tonne, lead edged 0.1% higher to $2,100, nickel

eased 0.3% to $25,855, and tin fell 0.8% to $32,645.

Shanghai copper was down 0.5%, zinc rose

0.3%, nickel was down 2.9%, lead edged 0.2%

lower, and tin dropped 4.3%.

($1 = 6.7345 Chinese yuan)

(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry

Jacob-Phillips, Shounak Dasgupta and Subhranshu Sahu)



financialpost.com

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