LONDON: Copper prices fell on Wednesday as rising COVID-19 cases in China tempered hopes that demand in the world’s biggest metals consumer will soon improve.

Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $7,995 a tonne in official open-outcry trading.

Prices of the metal used in power and construction surged from around $7,500 in early November to $8,600 on Nov. 14 on hopes that China will ease its economically damaging zero-COVID policy and US interest rates will rise less than feared.

But copper has since sagged as COVID infections in China increased and its yuan currency weakened against the dollar, making metals more expensive for Chinese buyers.

Large cities including Beijing, Shanghai and Guangzhou have tightened prevention measures, potentially stifling economic activity.

“There could be more than a few false starts for base metals markets before a sustainable rally really begins to develop,” said analysts at JPMorgan, adding that they expected prices to average $7,300 in the third quarter of next year.

“After bottoming over 2Q 2023, we believe a more sustained recovery in base metals prices will begin in 4Q 2023,” they said. “By this time, we expect China’s economy and metals demand will likely be hitting its full stride.” “As we move into mid-2023, the environment will become much more supportive for commodities and copper in particular,” Goldman Sachs analyst Nicholas Snowdon told the CRU World Copper Conference Asia.