London copper prices fell on Wednesday as worries about demand due to COVID-19 lockdowns in top metals consumer China and waning risk appetite among investors weighed on the red metal.
Benchmark three-month copper on the London Metal Exchange (LME) was down 0.6% at $9,797 a tonne, as of 0407 GMT.
The most-active May copper contract on the Shanghai Futures Exchange was flat at 73,100 yuan ($11,151.11) by noon break.
“Investors are weighing the stringent lockdowns impacting industrial activity against economically supportive measures,” commodity strategists at ANZ said in a note.
Worries grew that Beijing’s insistence on continuing with a “zero-COVID” policy and city-wide lockdown that has shrouded Shanghai for a month would harm domestic and global growth.
Expectations of aggressive rate hikes by the US Federal Reserve this year also fueled worries over global economic slowdown.
A global stocks sell-off extended into the Asia morning, as growing fears about the global economy forced investors to dump riskier assets in favor of safe havens.
“Markets started to rationalize their expectations after a poor track record set by the PBOC (People’s Bank of China) on supporting the market,” a metals trader in Singapore said, adding that “poor equities performance is also dampening sentiment.”
MONETARY SUPPORT: China’s central bank said it would step up prudent monetary policy support to the real economy, especially small firms hit by COVID-19.
COPPER: Chinese-owned MMG Ltd’s huge Las Bambas copper mine in Peru is considering a plan to evict indigenous communities that have camped on the property and forced a production halt.
NICKEL: The debacle over nickel trading on the London Metal Exchange highlights the need for regulators to focus far more on opaque corners of the commodities market, global securities watchdog IOSCO said on Tuesday.
PRICES: LME aluminum eased 0.1% to $3,061 a tonne, zinc lost 0.2% to $4,175.50, lead gained 0.7% to $2,335.50, while tin added 0.4% to $40,700.
Shanghai aluminum rose 0.2%, zinc was up 0.5%, nickel climbed 2.7%, lead shed 0.7%, while tin added 1.9%.
($1 = 6.5554 Chinese yuan)
(Reporting by Brijesh Patel in Bengaluru; Editing by Vinay Dwivedi and Sherry Jacob-Phillips)