Copper prices firmed as major miners warned that the coronavirus crisis would cut output and financial markets stabilised after two days of chaos caused by oil price falls.
Benchmark copper was up 1.9 per cent at $US5,124.50 a tonne at 1620 GMT, after tumbling almost 3.0 per cent on Tuesday.
Prices of the metal used in power and construction fell to a four-year low of $US4,371 in March as the coronavirus spread, but had rebounded to $US5,248 by Monday as lockdowns disrupted supply and China, the biggest consumer, began to reopen.
“There’s definitely more confidence coming through,” said BMO analyst Colin Hamilton.
“China data is not brilliant but is okay … and you are getting more signs of the supply pressures,” he said.
But supply disruptions could ease before demand for metal recovers, driving prices lower, although copper is unlikely to fall below $US4,400, he said.
European shares steadied after Brent oil prices crashed to their lowest since 1999 then rebounded.
Chile’s Antofagasta cut capital expenditure for the year and said copper production would be at the lower end of its guidance of 725,000-755,000 tonnes.
Canadian miner Teck Resources posted a big fall in quarterly profit and said it as suspending operations at the Antamina copper mine.
Output cuts by miners are creating supply concerns in China, which is recovering from its initial demand shock from the virus outbreak.
Copper treatment charges in China are in freefall, pointing to a tighter market, and Yangshan import premiums are at a seven-month high of $US84 a tonne.
JAPAN: Japan’s copper cable sales fell 2.4 per cent in March from a year earlier to 57,400 tonnes.
“The sell-off (in copper) was all about longs exiting,” said Alastair Munro at brokers Marex Spectron, estimating the net speculative short in LME copper at 14 per cent of active contracts as of Monday.
China’s primary aluminium demand has climbed by 150,000 to 200,000 tonnes in the past 30 days because of scrap shortages, research house Antaike said.
A new aluminium crisis looms as output rises despite falling demand.
Policy insiders say Beijing is preparing pro-growth steps; the US Senate approved a $US484 billion economic relief plan; it may take European Union countries until the summer or longer to agree how to finance economic recovery.
The global lead market swung to a surplus of 26,100 tonnes in February and the zinc oversupply rose to 130,100 tonnes, data from the International Lead and Zinc Study Group (ILZSG) showed.
LME aluminium was up 1.8 per cent at $US1,517.50 a tonne, zinc fell 0.5 per cent to $US1,901.50, nickel fell 2.0 per cent to $US11,950, lead rose 0.2 per cent to $US1,669 and tin was up 0.6 per cent at $US14,850.