Copper extends losses towards $4.00 on growth fears, news from Peru

• Copper extends the previous day’s pullback from a two-week high.
• China’s covid-led lockdown, recent geopolitical fears from Asia-Pacific join anxiety ahead of FOMC Minutes to weigh on prices.
• Progress has been made in talks concerning Las Bambas copper mine crisis in Peru.

Copper futures on COMEX drop half a percent to extend the previous day’s pullback from fortnight top to $4.29. Further, prices of benchmark three-month contract of copper on the London Metal Exchange (LME) also dropped below $9,500 by nearly 1.0% at the latest. In doing so, the red metal takes clues from firmer USD and fears of global growth, as well as chatters surrounding more production, heading into Wednesday’s European session.

Covid-led lockdowns in the world’s biggest copper consumer China join fears of economic hardships due to the skyrocketing inflation and the Russia-Ukraine offers a first-hand attack on the commodity prices.

Adding to the price-negative catalysts were the latest headlines suggesting a solution to protests at Peru’s Las Bambas copper mine. “The leader of a Peruvian indigenous community, whose protest led MMG's Las Bambas copper mine to suspend operations over a month ago, said on Tuesday that "progress" has been made toward a solution to the crisis,” said Reuters.

Elsewhere, the US Dollar Index (DXY) rises 0.27% intraday while bouncing off a four-week low to regain the 102.00 threshold. The DXY rebound tracks the US 10-year Treasury yields, bouncing off the monthly low while rising 0.8 basis points (bps) to 2.767%. Underlying the rebound in the yields could be the risk-negative headlines from China and North Korea, as well as the market’s preparations for the US Durable Goods Orders for April, expected 0.6% versus 1.1% prior, as well as the Federal Open Market Committee (FOMC) Minutes.

Alternatively, geopolitical fears concerning North Korea and Taiwan seem to defend the buyers but have failed so far.

Analysts at Citibank sound too bearish on copper as they said, "Recent consumption run rates imply copper and aluminum shifted into surplus globally in April." The analysts also mentioned, "It will likely take some time for the balances to tighten ... we are most bearish on nickel, then copper, and least bearish on aluminum and zinc," per Reuters.