LONDON- Copper prices slumped, pressured by a firmer dollar and uncertainty about how soon Chinese metals demand will rise after the country dismantled strict COVID-19 controls.
Three-month copper on the London Metal Exchange (LME) eased 0.8 percent to $9,258 a ton. US Comex copper futures dropped 1.3 percent to $4.21 a lb.
Copper has been mostly flat this week as markets in top metals consumer China were closed for the Lunar New Year holiday, but has rallied by 12 percent so far this year. The Shanghai Futures Exchange reopens on Monday.
Copper was slightly firmer in early thin trade on Friday, but went into negative territory after the dollar index extended gains in the wake of fresh US data on consumer spending and sentiment.
A stronger dollar makes commodities priced in the US currency more expensive for buyers using other currencies.
Any short-term correction, however, is not likely to deter bullish investors betting that the reopening of the world’s second-largest economy will spur economic activity and metals demand.
“My guess is that the market has a lot of upside left. There’s no crowded long trade; currently the positions are very light, so there’s still space to increase that,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
Torlizzi rejected the views of some analysts and investors, who said the market has overshot because physical demand is weak and any recovery will take time. – Reuters
