Copper prices fell on Monday as tepid physical demand prompted traders to reassess how quickly and strongly buying would pick up in top consumer China after the country dismantled its zero-COVID policy last month.
The most-traded March copper contract on the Shanghai Futures Exchange fell 0.6 percent to 69,750 yuan ($10,325.38) a ton as trading resumed after a week-long Lunar New Year holiday, while three-month copper on the London Metal Exchange was almost unchanged at $9,263 a ton.
Copper prices have risen 11 percent so far this year in London and 5.5 percent in Shanghai, underpinned by hopes that consumption of the metal in China would rebound following the removal of COVID-19 restrictions.
However, physical demand remained tepid prior to the Lunar New Year holiday, which ended on Jan. 27, as shown by falling premiums. On Friday, LME copper registered its first weekly fall since mid-December 2022.
Meanwhile, a weaker dollar and supply threats in Peru, the world’s second biggest supplier of mined copper, provided some support to copper prices on Monday.
Chinese copper miner MMG Ltd said its Las Bambas mine in Peru would likely have to halt production from Feb. 1 due to a shortage of “critical supplies” leading to a slowdown of operations. – Reuters
