Copper set for weakest quarterly gain since March 2020 on China curbs

Copper prices on Wednesday were set for their weakest quarterly gain since March 2020 on pressure from a firmer dollar and top consumer China’s efforts to tame a red-hot metals rally.

Three-month copper on the London Metal Exchange CMCU3 was almost unchanged at $9,332.50 a tonne, as of 0620 GMT, but gained 6.2% for the quarter. The metal lost 9% in June, on track for its first monthly fall in three.

The most-traded August copper contract on the Shanghai Futures Exchange SCFcv1 dipped 0.3% to 68,050 yuan a tonne, also set for the weakest quarterly gain since March 2020 when China’s recovery from the COVID-19 pandemic aided prices of metals.

Copper prices have pulled back in recent weeks after hitting a record high in May on the back of a global economic recovery, rising investments into renewable energy and electric vehicles, as well as a tight supply outlook.

Some of the pressure has come from China, with the world’s second-largest economy releasing state reserves of copper, aluminium, and zinc as part of its pledge to control a recent surge in commodities prices.

Strength in the dollar .DXY on expectations of sooner-than-anticipated policy tightening in the United States has also made greenback-priced metals more expensive and less appealing to holders of other currencies. FRX/

“For the next quarter, it will be all about how much demand from the rest of the world will be able to offset a slowing China. Most of that will depend on the success of finally getting the virus under control and seeing supply chains recover,” commodities broker Anna Stablum of Marex Spectron said.

“Aluminum has got a chance to outperform as the environmental restrictions in China will continue to weigh on supply and it seems like the nickel market looks pretty tight,” she added.


* Global demand of nickel used in batteries is expected to rise 18% this year from 2020, backed by strong sales of electric-vehicles in China, Sumitomo Metal Mining 5713.T, Japan’s biggest nickel smelter, said.

* LME nickel CMNI3 fell 0.5% to $18,270 a tonne, while lead CMPB3 rose 0.6% to $2,319.50 a tonne. ShFE lead SPBcv1 jumped 3.4% to 15,915 yuan a tonne while ShFE aluminium SAFcv1 declined 0.6% to 18,740 yuan a tonne.
Source: Reuters (Reporting by Mai Nguyen; Editing by Aditya Soni and Sherry Jacob-Phillips)


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