PHOTO
BEIJING/HANOI - Base metal prices rose on Friday, rebounding from a knee-jerk reaction to a bigger-than-expected rate hike by the European Central Bank in the previous session, while global supply risks also lent support.
Three-month copper on the London Metal Exchange was up 0.3% at $7,343.50 a tonne, as of 0521 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange advanced 0.3% to 56,650 yuan ($8,372.75) a tonne.
Freeport-McMoRan Inc, the world's top publicly traded copper miner, said current prices are insufficient to support new mines, which could worsen an already tight supply.
Miners Vale SA and Antofagasta Plc cut their 2022 copper production outlook; and supply risks returned at MMG Ltd's Las Bambas copper mine in Peru, one of the world's biggest, after a 30-day truce aimed at resolving conflicts between local communities and the company ended.
Zinc and aluminium also faced supply risks, as Europe, one of the metals' major producing regions, faces soaring energy prices.
Russia resumed pumping gas via its biggest pipeline Nord Stream 1 to Europe on Thursday but not enough to end the threat of rationing to cope with potential winter shortages.
LME zinc climbed 0.6% to $2,953.50 a tonne, on track for a weekly gain, and aluminium rose 0.8% to $2,439.50 a tonne, set for its biggest weekly gain since May 20.
Metals prices also rebounded from a slump in the previous session following a rate hike by the European Central Bank, the first in 11 years.
"Bearish sentiment towards interest rate hike by the ECB had been priced in previous futures performance," said Zhao Yi, a metals analyst at COFCO futures.
Gains, however, were capped as outlook remained weak amid tepid demand in top consumer China due to COVID-19 restrictions and as global recession risks weigh.
LME copper has dropped by around a third since its record high of $10,845 a tonne scaled in March.
ShFE lead dropped 1% at 15,120 yuan a tonne and tin declined 1.9% to 189,550 yuan a tonne, while nickel rose 0.3% to 159,930 yuan a tonne.
"Despite supply concerns sparked by energy shortage, current market sentiment is largely macro-driven, which means pressure on metals prices are likely to persist amid economic slowdown and the likelihood of the Fed's interest rate hike," Zhao added.
(Reporting by Mai Nguyen in Hanoi and Siyi Liu in Beijing; Editing by Sherry Jacob-Phillips)