Copper up on slowing COVID-19 infections


Copper has risen, supported by a slowdown in the death toll from coronavirus in some European countries and falling inventories, though fears of recession continued to weigh on prices.

Benchmark copper on the London Metal Exchange was up 1.1 per cent at $US4,891 a tonne by 1705 GMT.

Its 1.0 per cent rise last week on positive factory data from top consumer China snapped a six-week losing streak.

The number of deaths and new infections from the coronavirus eased in countries including France, Italy and Spain.

Meanwhile Japan became the latest country to unveil a stimulus package to cushion its economy against a knock from the epidemic.

“As major economies reach and get over the peak of the (coronavirus) curve, we anticipate risk appetite to improve. However, in the long run, as the global economic conditions remain weak, we expect prices to give back those gains,” said Sucden Financial’s head of research Geordie Wilkes.

Stocks of copper in LME-approved warehouses shed 1,050 tonnes to 217,475 tonnes. Stocks have been in steady decline since hitting a 2020 high of 220,325 tonnes on March 17.

Copper inventories in warehouses tracked by the Shanghai Futures Exchange fell for a third straight week on Friday to 332,435 tonnes, down 13 per cent from their near four-year high hit in mid-March, exchange data showed.

Copper producer Antofagasta said it would suspend operations at its Los Pelambres Expansion project in Chile for four months because of the coronavirus.

Other companies in Chile, the world’s largest source of mined copper, were also considering output cuts as the country took strict measures to contain the pandemic.

Aluminum Corp of China, , known as Chalco, will consider carrying out maintenance or even shuttering some aluminium production as well as cutting alumina output due to low prices.

LME aluminium was down 0.4 per cent to $US1,475 a tonne, after touching its lowest since January 2016, at $US1,459.50.

This was its sixth straight session of losses, and prices are down 19 per cent this year.

Marex Spectron’s Alastair Munro noted that positioning across metals remains short mainly in zinc and aluminium, which are either at or close to records on both the LME and SHFE exchanges.

“Whilst these short positions are not in themselves reasons to own metals, they do raise the possibility of a very short-term squeeze higher, especially given light risk appetite amidst ongoing uncertainty,” he said.

Shrinking nickel supplies due to coronavirus-related shutdowns and operations being pushed into a loss by a price drop are expected to offset falling demand from stainless steel mills, leaving the market with only a small surplus.

LME zinc rose 1.0 per cent to $US1,900 a tonne, lead added 1.3 per cent to $US1,678, tin was up 1.3 per cent at $US14,310 and nickel gained 0.6 per cent at $US11,305.

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