Copper prices retreated at the end of the week on fears about a deep global recession and pessimism over the development of drugs to treat COVID-19.
Some other base metals joined a downturn in stock markets after reports that an experimental antiviral drug failed to help patients with severe COVID-19.
Investors are also fretting about data showing how shutdowns have hit economies, including a survey released on Friday showing business morale crashed in April in Germany, Europe’s largest economy, in its most dramatic fall on record.
“The economic data we’ve had has just been horrendous, they just indicate that we’re facing a very deep contraction,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“If we’re going to have a deep contraction, then demand will be under pressure and that is keeping industrial metals markets from joining the exuberance we’ve seen in the stock market.”
Three-month copper on the London Metal Exchange was down 0.3 per cent at $US5,143 a tonne and was on track for its first weekly decline in four weeks.
Losses were limited in copper, widely used in power, transport and construction, due to expected declines in supply as some mines have been forced to shut due to the pandemic.
The global economy will suffer its steepest contraction on record this year, with a likely U-shaped recovery, a Reuters poll showed.
MMG Ltd said it could restart copper concentrate shipments from the site of its Las Bambas operations in Peru to the port “as soon as next week”.
The Yangshan spot copper premium for physical metal has climbed to $US87 a tonne, the highest since November 2018, as Chinese industry cranks up amid the country lifting coronavirus restrictions.
“The pace of China’s restocking over the past few weeks has surprised market participants,” Alastair Munro at broker Marex Spectron said in a note.
The global nickel market surplus narrowed to 13,400 tonnes in February from a revised surplus of 13,900 tonnes in the previous month, data showed on Friday.
LME on-warrant nickel inventories – those not earmarked for delivery – rose to 176,556 tonnes, the highest since September 2018 and up about 40 per cent so far this year, LME daily data showed on Friday.
LME nickel gained 0.7 per cent to $US12,250 a tonne.
Banks’ diminishing appetite to lend due to the coronavirus crisis will keep prices under pressure amid a ballooning surplus.
Aluminium added 0.5 per cent to $US1,518 a tonne, zinc rose 0.7 per cent to $US1,886, lead fell 1.2 per cent to a one-month low of $US1,626.50 and tin shed 0.7 per cent to $US14,890.