LONDON: Copper prices rebounded on Thursday as the prospect of lockdowns being lifted in top metals consumer China buoyed sentiment despite worries about weaker global growth. Nickel jumped as much as 11%, largely due to short-covering amid thin volumes, traders said.

Benchmark three-month copper on the London Metal Exchange (LME) was up 2.1% to $9,429.50 a tonne at 1615 GMT after dropping 1.4% in the previous session.

More Shanghai residents were given the freedom to go out to shop for groceries for the first time in nearly two months on Thursday as authorities set out further plans for exiting the city-wide COVID-19 lockdown.

Stock markets slumped on Thursday on concern about an economic downturn, fuelled a day earlier by bleak results and outlooks from big US retailers.

“The fact that copper is holding up today with the S&P 500 down, points to some underlying strength,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“That strength is fundamentally based, with signs of lockdowns being lifted in China and low inventories which aren’t there to cope with a potential pick-up in demand.” Aggressive US rate-hike bets, the ongoing lockdowns in China and a batch of poor economic readings from major nations has led to slowdown concerns and weighed on industrial metals. LME nickel surged 8.9% to $28,490, the biggest one-day gain in two months, after briefly spiking nearly 11%. Nickel has largely been calm in the aftermath of extreme volatility in March that saw trading suspended and restrictions imposed.

Supporting metals was a weaker dollar index, which hit a two-week low, making greenback-denominated metals less expensive for buyers using other currencies.

The global nickel market deficit deepened to 11,100 tonnes in March, compared with a shortfall a month earlier of 1,800 tonnes, data from the International Nickel Study Group showed on Wednesday.

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