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By Mai Nguyen
Jan 10 (Reuters) – Prices of most base metals fell on Tuesday as traders gauged the risks of a global economic downtrend and weak consumption, shedding gains logged in the previous session after top consumer China reopened its borders.
Three-month copper on the London Metal Exchange CMCU3 was down 0.9% at $8,778 a tonne, as of 0642 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 rose 1.4% to 66,570 yuan ($9,819.31) a tonne, tracking overnight gains in London.
LME aluminium CMAL3 dipped 0.4% to $2,428 a tonne, zinc CMZN3 declined 1.2% to $3,167 a tonne, lead CMPB3 fell 1% to $2,229 a tonne and tin CMSN3 shed 2.1% to $25,310 a tonne.
SHFE lead SPBcv1 declined 0.3% to 15,515 yuan a tonne, tin SSNcv1 was down 1% at 203,440 yuan a tonne, while aluminium SAFcv1 rose 1.5% to $18,185 a tonne and zinc SZNcv1 climbed 1.9% to 23,770 yuan a tonne.
Base metals prices rose strongly on Monday, driven higher by an improving demand outlook after top consumer China reopened its border after years of restrictions due to the COVID-19 pandemic, boosting LME copper to its highest in more than six months.
But fundamentally, the global economy is still at risk of a recession and the U.S. dollar could still firm up even more amid prospects of further interest rate hikes, making greenback-priced metals more expensive to holders of other currencies.
“(Prices) went too high last night. I am neutral to bearish short term. I don’t see strong prices till at least Q3,” said a broker.
Physical demand of metals is also expected to slow as China is about to enter its week-long holiday break to celebrate the Lunar New Year during Jan. 23-27.
Yangshan copper premium SMM-CUYP-CN, which indicates demand for imported copper into China, fell to $37.50 a tonne on Monday, from $152.50 a tonne seen less than three months earlier.
SHFE nickel SNIcv1 hit a one-month low of 204,180 yuan a tonne on rising supply worries after Bloomberg reported that nickel producer Tsingshan is looking to boost refined nickel output in China from intermediate forms like ferronickel.
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TOP/MTL or MET/L
($1 = 6.7795 yuan)
(Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee)
((mai.nguyen@thomsonreuters.com; Reuters Messaging: mai.nguyen.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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