Copper rises after seven-session slide as oil pullback eases slowdown concerns

Copper prices climbed on Friday for the first time in seven sessions as oil prices retreated from four-year highs, easing the risk that high energy costs could curb global economic growth and demand for metals. Also supporting copper was datafrom earlier this week showing that manufacturing activity in top metals consumer China expanded in April at its fastest pace since the end of 2020. Benchmark three-month copper on the London Metal Exchange was up 0.5% at $13,050 a metric ton at 0453 GMT, but still down 1.9% over the week. Trading activity was muted, with the Shanghai Futures Exchange closed until Wednesday for the Labour Day holiday. Copper remained near record highs due to a flow of speculative cash into metals and mining and fears that production will be cut by a shortage of sulphuric acid due to the closure of the Strait of Hormuz. However, with no sign of a resolution to the conflict, Brent crude ramped steadily up from around $95 a barrel on April 20 to more than $126 a barrel on Thursday before the rally faltered and prices slipped back to around $111. The combination of high energy prices and high copper prices do not bode well for copper demand, Commerzbank analyst Thu Lan Nguyen wrote in a note. "We view the further upside potential for copper as limited, at least in the short term," she wrote. Copper inventories in Shanghai Futures Exchange warehouses have more than halved from a peak in March, supporting prices, but this is in line with seasonal trends and inventories elsewhere are high. LME copper stocks have more than doubled since early January and inventories in Comex warehouses increased around 25-fold over the last year. Last month, the International Copper Study Group forecast the market to be in surplus this year. Glencore on Thursday reported a 19% surge in its first-quarter copper production, while Chile's statistics agency said national copper output in March fell 9% year-on-year. LME three-month aluminium was up 0.5% at $3,490.50 a ton, zinc climbed 0.5% to $3,376.50 a ton, nickel fell 0.5% to $19,375 a ton, lead slipped 0.1% to $1,953.50 and tin was down 0.1% at $49,190 a ton.