LONDON: Copper and other base metal prices rebounded on Wednesday, buoyed by hopes that China will unleash a wave of metal-intensive infrastructure spending to counter the impact of COVID-19 lockdowns.
Benchmark three-month copper on the London Metal Exchange (LME) was up 0.2% to $9,879 a tonne at 1630 GMT, after falling about 7% over the past week up to Tuesday.
US Comex copper rose 0.7% to $4.47 a lb.
“The focus over the past few weeks has been the Chinese lockdowns and the Fed hikes are hurting growth,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“But today the focus is on comments calling for an all-out infrastructure push in China, which is something the market likes. Whether it’s enough to call a floor in the market, it’s probably too early to say.” China will step up infrastructure construction to boost domestic demand and drive economic growth going forward, state TV reported on Tuesday.
Also boosting sentiment were comments by China’s central bank saying it would step up prudent monetary policy support to the real economy.
The most-active May copper contract on the Shanghai Futures Exchange ended daytime trading up 0.3% at 73,320 yuan.
LME copper inventories extended their gains, rising to 148,500, the highest since October last year and having doubled since early March.
Limiting the upside was a strong dollar index, which touched the highest since March 2020. A firm dollar makes metals priced in the US currency more expensive to buyers using other currencies.
Global demand for nickel is expected to increase to 3.02 million tonnes in 2022 from 2.78 million tonnes in 2021, the International Nickel Study Group said.
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.
LME aluminium climbed 1.3% to $3,104 a tonne, zinc gained 1.3% to $4,238 and nickel advanced 1.5% to $33,555, but lead dropped 1.2% to $2,292.50 and tin fell 1.1% to $40,100.
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