By Pratima Desai
LONDON — Industrial metals prices improved on Monday as plans by leading consumer China to ease COVID restrictions raised expectations of a revival in demand, although damage to growth from lockdowns limited progress.
* By 1109 GMT, benchmark copper on the London Metal Exchange (LME) was up 1.05% to $9,255.50 a tonne, while aluminum was up 1.1% to $2,811 from the previous week’s high of $2,865.
* “China’s COVID-zero lockdown policy, energy-driven inflation, rising US real interest rates and a strengthening dollar are creating demand headwinds,” said David Wilson, analyst at BNP Paribas.
* Wilson expects “continued market shortages outside of China, rising smelting costs in Europe and reduced aluminum exports from China in the second half of 2022” to support aluminum.
* Shanghai on Monday laid out plans for a return to more normal life from June 1 and an end to a COVID-19 lockdown that has lasted more than six weeks.
* China’s economic activity slowed sharply in April as lockdowns took a heavy toll on industrial production and employment and raised fears the economy could contract in the second quarter.
* Rising interest rates and expectations of further rate hikes have buoyed the dollar, making commodities in the greenback price more expensive for holders of other currencies.
* Among other base metals, zinc was up 1.6% to $3,546 a ton; Lead rose 2% to $2,101; Tin rose 3.1% to $34,405; and nickel fell 3.3% to $26,350.