LONDON: Copper and aluminium prices rebounded on Friday after two days of declines, bolstered by tight supply, hopes of more Chinese stimulus and firmer oil prices.

Benchmark copper on the London Metal Exchange gained 0.6% to $10,378 a tonne in official open outcry trading while aluminium climbed 1.1% to $3,421.

“Base metals have been tracking to some extent to what’s going on in energy markets, not least because that pushes up their costs,” said Caroline Bain, chief commodities economist at Capital Economics.

“Supply of most metals is constrained, stocks are low, so we’re forecasting prices will stay high for most of this year, even with the slowdown in China.”

Bain said metals prices may also be supported by optimism about major stimulus measures in China, although Capital Economics was wary about that.

“For now we’re sticking with the view that we’re not going to see a big stimulus package unless the COVID situation really deteriorates,” she said.

Shanghai on Friday announced a record 21,000 new cases and a third consecutive day of COVID testing as a lockdown of its 26 million people showed no sign of easing and other Chinese cities tightened curbs.

Capping the upside was a rise in the dollar index to 100 for the first time in nearly two years, supported by the prospect of a more aggressive pace of Federal Reserve interest rate hikes.

A stronger dollar makes greenback-denominated metals more expensive for buyers using other currencies.

Rio Tinto Ltd took sole charge of operations and production at refiner Queensland Alumina Limited, partly owned by Russian aluminium producer Rusal, following government sanctions.

Commodity trader Trafigura and other firms are moving to take large amounts of zinc out of LME approved warehouses in Asia, sources familiar with the matter said.

LME zinc rose 1.5% to $4,249 a tonne, lead gained 1.5% to $2,420, tin added 0.5% to $43,800 and nickel advanced 0.8% to $33,950.