Copper rebounds but stuck in weekly loss amid banking chaos

By Onome Amuge

Copper prices improved at the closing session of the week but the rebound was not enough to offset earlier losses earlier as concerns about a turmoil in the banking sector raised the threat of bank failures and slower economic growth.

Benchmark copper on the London Metal Exchange (LME) was up 2.1 per cent at $8,695.50 a tonne but still down nearly two per cent over the week to a 10-week low of $8,442 a tonne.

Market data showed that prices plunged by 3.7 per cent during the week as the collapse of  Silicon Valley Bank and First Republic Bank,two mid-sized U.S. lenders, were followed by a crisis engulfing Switzerland’s Credit Suisse.

Ole Hansen, commodity strategist at Saxo Bank, said the mood on wider markets will dictate copper’s near-term price movement, though he expects strong fundamentals to lift prices before long.

On their part, analysts at Citi, projected a drop in the value of copper to $8,000 a tonne in the coming months amid concern over the U.S. banking system and credit growth.

They consider it as a strong long-term buying opportunity, while also predicting that prices will recover to $9,000 within 6-12 months.

On the other hand, copper demand In top consumer China, is growing firm and is likely to stay strong in the next quarter, buoyed by a seasonal peak in demand and easing COVID-19 restrictions.

For other industrial metals, LME aluminium  gained 1.2 per cent at $2,294.50 a tonne, zinc was up  two per cent to $2,915 a tonne, nickel advanced 0.8 per cent to $23,420 a tonne, lead  climbed 0.1 per cent to $2,068.50 a tonne, and tin rose 1.2 per cent  to $22,490 a tonne.

However, while nickel recorded a weekly gain, the rest witnessed weekly declines.