METALS-Copper prices rise on global supply worries

Credit: REUTERS/Nguyen Huy Kham

BEIJING, Oct 17 (Reuters) - Copper prices rose on Monday as global supplies tightened, although its gain was capped by demand uncertainty due to China's stance on COVID-19 curbs and worries around global economic growth.

Three-month copper on the London Metal Exchange CMCU3 added 0.5% to $7,576 a tonne by 0204 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange SCFcv1 climbed 0.5% to 63,280 yuan ($8,797.32) a tonne.

Stocks at warehouses of LME, COMEX, ShFE and Shanghai-bonded warehouses totalled 253,000 tonnes last week, a weekly drop of 12,000 tonnes, according to a report by CITIC Futures.

Total copper production in Chile, the world's top copper producer, fell 10.2% in August to 415,500 tonnes.

Tight supplies, better demand in China, and an open import arbitrage buoyed the Yangshan import copper premium SMM-CUYP-CN to $142.50 a tonne on Friday, the highest since March 2014.

But, uncertainty around demand prevailed as the world's top metal consumer China's zero-COVID policy persisted.

Chinese President Xi Jinping reiterated the country's COVID-19 stance when he kicked off a Communist Party Congress on Sunday, against market expectations of an easing in such curbs.

Weighing on prices further, recession fears amid global central banks' aggressive monetary policy weighed dented copper's rally. Copper is often used as an economic indicator.

Among other metals, ShFE aluminium SAFcv1 slid 0.5% at 18,510 yuan a tonne, nickel SNIcv1 fell 0.8% to 180,770 yuan, while zinc SZNcv1 held at 24,620 yuan a tonne.

LME aluminium CMAL3 lost 0.9% to $2,286 a tonne, zinc CMZN3 was down 0.5% to $2,925 a tonne, and lead CMSN3 slid 0.5% to $2,030.50 a tonne.

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($1 = 7.1931 Chinese yuan)

(Reporting by Siyi Liu and Dominique Patton; editing by Uttaresh.V)


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