LONDON: Copper prices ticked down to their lowest in more than a month on Friday as top metals consumer China extended COVID restrictions and concerns grew about a potential recession.

Benchmark copper on the London Metal Exchange was down 0.8% at $7,533 a tonne by 1030 GMT, after touching its lowest since July 27.

Some districts of China’s southern tech hub Shenzhen extended COVID curbs on Friday, but stopped short of a full lockdown, while the megacity of Chengdu went into lockdown late on Thursday.

Naeem Aslam, chief market analyst at Ava Trade, said the curbs in China would have an impact on both supply and demand.

“If smelters are shut down you will have less supply, but it also means less consumption, so it’s a double-edged sword,” he said.

“One main reason we’re seeing prices move to the downside is that the way central banks are reacting is concerning investors and traders who are worried about a potential recession.”

Aslam said key U.S. jobs data due at 1230 GMT on Friday would be closely watched, and a very low figure for jobs growth would fan fears of a recession.

Market participants are increasingly concerned that Europe’s energy crisis will impact demand, according to ANZ research.

The EU is likely to place restrictions on gas consumption in heavy industry if shortages persist, and these demand concerns are outweighing supply-side issues, it added.

Aluminium lurches to 16-month low on renewed demand fears

Helping aluminium prices outperform was news that Dutch aluminium maker Aldel was mothballing the remaining capacity at its facility in Farmsum, citing continuing high energy prices and a lack of government support.

LME three-month aluminium dipped 0.1% to $2,292, zinc dropped 3.7% to $3,138, lead gave up 0.2% to $1,898, nickel fell 0.9% to $20,130 and tin eased 3.9% to a 20-month low of $20,235.