Copper is top performer in Friday morning rebound for LME base metals

Copper and zinc made the biggest morning gains among the base metals on the London Metal Exchange on Friday, April 29, supported by the Chinese government's commitment to supporting its economy through its ongoing Covid-19 lockdowns

“China’s stimulus promises this morning have turned the market risk-on and that has lifted the metals, but some global companies are warning that they face supply headwinds, which is evidence of the impact of China’s Covid-19 lockdowns and the supply chain disruptions caused by Russia’s invasion of Ukraine,” Fastmarkets head of base metals and battery research William Adams said on Friday.

Copper’s three-month price was up to $9,874.50 per tonne at 9am from Thursday’s closing price of $9,697 per tonne, which was down 1.6% from Wednesday’s closing price.

Some 4,500 lots of the red metal had been traded by 9am, which was roughly a third of Thursday’s volumes. Aluminium volumes were next, with just under 2,000 lots traded.

Zinc’s three-month contract, meanwhile, rose 1.6% on Friday morning to $4,192.50 per tonne from Thursday’s closing price of $4,136 per tonne, which was its lowest level since March 29.

LME prices have also been supported by reports of widespread supply tightness so far in 2022.

“Many of the large miners have reported mining supply challenges over the first quarter of the year, including logistical and supply chain issues that have been keeping supplies tight,” ING’s senior commodities strategist Wenyu Yao said.

One of the major miners was Glencore, which announced lower production guidance for copper and zinc for 2022 following lower output of both metals in the first quarter, having declared force majeure on copper deliveries out of Africa.

The International Lead and Zinc Study Group said on Friday that it was expecting a deficit of 292,000 tonnes for zinc’s refined market this year.

Other highlights

  • There was a 6,075-tonne cancellation of copper from LME warehouses on Friday, according to exchange data, with the majority (4,050 tonnes) booked for removal from New Orleans in the US.
  • The US Dollar Index was last seen at 102.96, after touching a five-year high of 103.95 on Thursday.
  • Tin’s three-month contract was up to $40,640 per tonne at 9am, a 1.5% rise from Thursday’s 5pm price of $40,045 per tonne.
  • Economic data out later on Friday includes the European Union’s consumer prices (CPI) and gross domestic product figures, together with US data on core personal consumption expenditure, the Chicago purchasing managers index and the University of Michigan’s inflation expectations and consumer sentiment.
What to read next
Aluminium and nickel appear to have once again escaped inclusion in the latest list of sanctions imposed by western governments on Russia, ending days of speculation that increased both the prices and the traded volumes of the metals.
Fastmarkets launches MB-CU-0513 copper cathode equivalent grade (EQ), cif Southeast Asia, $/tonne on Tuesday February 20.
Fastmarkets’ 2024 outlook for key raw materials and ingredients used in the production and distribution of fast-moving consumer goods
Weak demand continues to stem profitability and prevent capacity return in the European aluminium market, Norsk Hydro’s chief executives told Fastmarkets in an exclusive interview on Wednesday February 14.
The publication of Fastmarkets’ rand fixing prices for LME trade for Monday February 12 were delayed due to a technical issue.
The copper concentrate market was already tight, but the addition of major new smelting capacity this year – starting with the expansion of Freeport’s Gresik smelter in Indonesia — will likely mean maintenance breaks, capacity curtailments and potentially even closures while operating costs start to become untenable, Fastmarkets understands.