On Friday, economic bellwether London copper futures’ prices had sharply rebounded with other industrial metals edging higher, however, LME (London Metal Exchange) copper contracts had tumbled over 2.0 per cent in the week amid a grim economic outlook with top metal exporter China reporting its feeblest factory output since February 2020 last month.
Aside from that, although copper prices had pared some of their losses, several industry analysts had cautioned of further downswing in a near future, largely over growing frets of an upsurge in crude oil and natgas prices alongside concerns over China’s growth momentum.
Apart from a sweeping downturn in factory activities last month, plausible ripple effects of two successive bond defaults last month in China’s cash-strapped real estate giant, Evergrande Group, had added to further holocaust on investors’ optimism.
Meanwhile, addressing to a dismal technical outlook for industrial metals including copper contracts in a near- to intermediate-term, ANZ analysts wrote in a client note, “Overriding risks from a short-term perspective are still there.
The technical outlook looks pretty grim on some of the key stock market indexes while the continued rise in fuel costs is sapping the industry’s ability to produce and grow. Although the power crisis could have a mixed impact on supply and demand for commodities, the market is giving more weightage to the resulting demand losses from slowing economic growth.
Copper contracts rise, but post weekly decline of over 2.0 per cent
Quoting statistics, in the day’s London Metal Exchange round-off, London copper contracts scheduled to be expired on December, jumped 2.1 per cent to $9,099 per ton after taking a tattering header of 2.4 per cent in previous session.
On the week, London copper contracts, which had hit an all-time peak of $10,747.50 per ton in May this year, had reported a decline of over 2.2 per cent. Among other industrial metals, LME aluminium contracts shed 0.2 per cent to $2,853 per ton.
However, amid frets of a long period of supply constraint alongside disruptions in supply chains, Zinc edged 0.1 per cent higher to $2,991 per ton, while Nickel rose 0.4 per cent to $18,000 a ton and tin added 0.2 per cent to $33,975 a ton.