Make Kitco Your Homepage

Industrial metals surge after China eases COVID measures

Kitco News

LONDON, Nov 11 (Reuters) - Industrial metals prices jumped on Friday after China eased some coronavirus rules, fuelling expectations that it will abandon a zero-COVID policy that has reduced economic activity and demand for metals.


Metals prices had already jumped on Thursday after softer than expected U.S. inflation data suggested the U.S. Federal Reserve could scale back interest rate rises.


The news gave hope that major restraints on economic growth could be less severe than feared in the coming months.


Global stock markets rallied and the dollar weakened sharply, giving a boost to dollar-priced metals by making them cheaper for buyers with other currencies. Benchmark copper on the London Metal Exchange (LME) was up 2.7% at $8,495 a tonne at 1721 GMT after reaching $8,555, the highest since June.


Prices of the metal used in power and construction have risen 14% this month on hopes of a revival in Chinese demand, but remain down more than 20% from a peak in March due to weaker economic activity.


"The situation has changed quite significantly ... the outlook as improved," said a commodities market analyst in Germany, adding that copper should reach $9,000 by year-end.


He said low inventories would also support prices and that speculative investors who have been neutral or bearish on copper could lift prices sharply if they turn bullish. China's easing included shortening quarantines by two days for close contacts of infected people and for inbound travellers but a full dismantling of COVID controls may be a long way off.


The country is still struggling to control a wave of infections and recent economic data has been unexpectedly weak.


Economies are faltering elsewhere too, with the European Commission forecasting 0.3% euro zone growth next year and Moody's cutting India's growth projection to 4.8% in 2023.


In other metals, LME aluminium was up 6% at $2,467 a tonne, its biggest one-day rise since 2009. Zinc rallied 4.9% to $3,024, nickel gained 5.4% to $27,360, lead rose 2.7% to $2,155 and tin was up 4.4% at $21,210.


(Reporting by Peter Hobson Additional reporting by Siyi Liu and Dominique Patton; editing by David Evans and Louise Heavens)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.