Copper eased overnight as new coronavirus cases raised fears over a global economic recovery, offsetting upbeat data and potential supply disruptions in Chile.
Three-month copper on the London Metal Exchange (LME) was down 0.5 per cent at $US5,878 a tonne by 1620 GMT after briefly rising to its highest since January 24 at $US5,948.
“We have been hovering around $US5,900 a tonne and market players seem to be divided on what should be the more important price drivers,” said Commerzbank analyst Daniel Briesemann.
“On the negative side, there are rising numbers of new infections and fears of a possible second wave of coronavirus, so that’s keeping the copper price in check.”
A string of better than expected US and European economic data was overshadowed by a surge in coronavirus cases in the United States and South America.
Supply concerns were triggered by BHP announcing stricter health protocols at the world’s largest copper mine, Escondida, while the Chilean government imposed lockdowns for the mines-heavy Antofagasta region from Tuesday.
The International Monetary Fund said the pandemic was causing wider and deeper damage to economic activity than first thought, prompting it to cut its 2020 global output forecasts further to 4.9 per cent from 3 per cent.
Falling copper stocks in warehouses tracked by the Shanghai Futures Exchange (ShFE) indicated strong demand from top consumer China.
Stocks fell by 9.1 per cent to 99,971 tonnes, their lowest since January 11 last year, exchange data showed.
China’s May aluminium imports more than doubled year on year but failed to hit an expected decade-high, official data showed.
The aluminium market is pricing in rising prospects of the United States replacing Canada’s exemption from import tariffs with quotas.
Volumes were low on ShFE because the exchange will be closed on Thursday and Friday for the Dragon Boat Festival in China and will reopen on June 29.
LME aluminium fell 1.4 per cent to $US1,572 a tonne, zinc shed 0.4 per cent to $US2,031, lead advanced 0.95 per cent to $US1,766, tin lost 1.6 per cent to $US16,620 and nickel was down 1.7 per cent at $US12,510.