METALS-Copper languishes near 17-month low as slowdown fears mount

(Recasts, adds comments, details and updates prices)

By Brijesh Patel

July 4 (Reuters) – Copper prices slipped on Monday to hover
near a 17-month low as renewed lockdowns in top consumer China
and the prospect of aggressive rate hikes stoked fears of global
economic slowdown, denting demand for metals.

Three-month copper on the London Metal Exchange was
down 0.3% at $8,027.50 a tonne, as of 0404 GMT.

Copper, used in power and construction sectors and is
considered a gauge of economic health, fell to its lowest since
early-February 2021 at $7,955 on Friday.

The most-traded August copper contract in Shanghai
fell 2.1% to 61,250 yuan ($9,153.68) a tonne by the midday
break.

“Softening demand and concerns over a growth slowdown are
dragging on the sector. We think improving Chinese economic
activity will stabilise prices,” ANZ analysts said in a note.

“Inventories for metals are shrinking to multi-year lows.
Supply challenges due to higher energy prices and other
operational issues will allow little room for inventories
build.”

From the United States to the euro zone, activity at
factories slowed to levels last seen during the initial wave of
the pandemic.

Adding to demand worries, cities in eastern China tightened
COVID-19 curbs on Sunday as coronavirus clusters emerge, posing
a new threat to the country’s economic recovery under the
government’s strict zero-COVID policy.

INFLATION: Euro zone inflation hit a record high in June as
price pressures broadened, and its peak could still be months
away, firming the case for rapid European Central Bank rate
hikes starting this month.

FED: The U.S. Federal Reserve is widely expected to deliver
another 75-basis-point rate hike this month to combat soaring
inflation.

DOLLAR: The dollar hovered close to recent two-decade
highs against its rivals, making greenback-denominated metals
more expensive for other currency holders. [USD/]

OTHER METALS: LME aluminium gained 1% to $2,468 a
tonne, zinc was up 1.2% at $3,066.50, and lead
rose 0.2% to $1,939.

Shanghai aluminium added 0.6%, zinc
slipped 1.3%, nickel fell 1.6%, lead gained
0.3%, and tin lost 1.5%.

($1 = 6.6913 Chinese yuan)

(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry
Jacob-Phillips)
((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848
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