Copper prices are on track for their first weekly gain in seven weeks as investors return to riskier assets after a sell-off.
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Benchmark copper officially traded 0.9 percent higher at $7,391 a tonne on the London Metal Exchange, up nearly 3 percent on the week.
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But after hitting $6,955 last week, the lowest since November 2020, metals used in power and construction are still down more than 30% from their March highs.
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Industrial metals and global stocks have tumbled in recent months as inflation soared and central banks began raising interest rates at a rapid pace that threatened to tip the world into recession.
But this week investors scaled back expectations of a US rate rise. Global stocks rose for a sixth straight day and the DOLLAR weakened from a 20-year high, helping dollar-denominated metals make them cheaper for buyers of other currencies.
NiteshShah, analyst at WisdomTree, said: "the market is on edge because the central bank is so hawkish... But the upward pressure on interest rates should ease at some point."
Officials in China, the largest metals consumer, have again said they will stimulate the economy after a sharp slowdown caused by COVID-19 restrictions. To read the full article
Shah said demand from China should improve and prices are expected to fluctuate.
"We need to break [above] $7,500 to be bullish," said one trader in London.
The near-term economic outlook remains grim. After the ECB's 50 basis point hike on July 21, 2022, investors expect a 75 basis point hike in the US next week.
The decline in manufacturing in the eurozone is accelerating and factory growth is slowing in Japan and Australia.
Freeport-mcmoran, the miner, said copper prices were insufficient to support new mines, which could add to already tight supply. To read the full article
But despite deficits later in the decade, many analysts expect copper supply to grow strongly by 2023.
LME aluminium rose 1.5 per cent to $2,457 a tonne, zinc rose 1.4 per cent to $2,976, nickel rose 0.7 per cent to $21,625, lead fell 0.7 per cent to $1,999 and tin fell 3 per cent to $24,100.
