Copper prices fell on Friday on concerns that a rising death toll from the coronavirus in China could lead to a bigger hit to economic activity and metals' demand. Three-month copper on the London Metal Exchange (LME) ended 1.3% lower at $5,663 an ounce.
However, prices ended the week 1.8% higher, marking the first weekly gain in three on hopes for a cure for the virus. "Metals prices are looking for some direction at the moment," said Caroline Bain, senior commodities economist at Capital Economics.
The death toll from the virus in mainland China rose to 636 on Friday, up by 73 from the previous day, the National Health Commission said. "We have had two days where (the) number of infections has been lower so one hopes that the virus is being brought under control but it's still too soon to be in any way certain."
There have been two deaths outside mainland China, in Hong Kong and the Philippines and nearly 320 cases have been reported in 27 other countries and regions outside mainland China. Metals prices mostly fell even as China's central bank pledged support for the economy to cushion the blow from the virus outbreak.
S&P Global Ratings cut its Chinese 2020 growth forecast to 5%, down from 5.7% on Friday, saying the impact of the coronavirus outbreak could take a heavy short-term toll. Guangxi Nanguo Copper smelter has declared force majeure on deliveries of copper concentrate as a result of the outbreak, sources told Reuters.
Nonferrous metal output in China will fall at least 10% in February but operations are expected to normalise after the second quarter, the country's metal association said. Japan's Mitsubishi Materials Corp bought a 30% stake in the Mantoverde copper mine in Chile and associated copper project for $236 million to secure more concentrates for its smelters, the company said.
Norsk Hydro reported lower-than-expected fourth-quarter earnings on falling metal prices and said it expects global supply of aluminium to outstrip demand in 2020. Chile copper export revenue jumped 8.3% to $2.716 billion in January, the central bank said. Inventories of zinc in LME-approved warehouses jumped to 62,675 tonnes, data on Friday showed, the highest since Oct. 9.
Rising stocks have pushed down the premium of LME cash zinc over the three-month contract to $4.50 a tonne, near its lowest in three-months. LME aluminium shed 0.6% to $1,726 a tonne, zinc dropped 2.8% to $2,145, lead was down 1.5% to $1,817, tin shed 3.1% to $16,175 and nickel ended 2.2% lower to $12,775.
Comments
Comments are closed for this article.