Copper below $5,000 for the first time since 2016

• Benchmark copper on the LME was down 5% at $4,884 a tonne at 1146 GMT. Prices of the metal used widely in power, construction and manufacturing are on course for their largest daily drop since January 2015.

LONDON: Copper prices crashed below $5,000 a tonne for the first time in more than three years on Wednesday as growing expectations of surpluses were reinforced by large deliveries of the metal to London Metal Exchange registered warehouses.

Benchmark copper on the LME was down 5% at $4,884 a tonne at 1146 GMT. Prices of the metal used widely in power, construction and manufacturing are on course for their largest daily drop since January 2015.

Copper touched $4,863 earlier, a drop of more than 25% since the middle of January and the lowest since November 2016.

"At the start of the year, the copper market was expected to be in balance. That has changed," a fund manager said. "We're going to see significant surpluses now, prices need to fall so producers cut output. It's the only way to balance the market."

VIRUS: Economic activity in top consumer China and other major economies has been shredded by government measures to contain the coronavirus, which has so far claimed more than 8,000 lives.

China accounts for about half of global copper consumption, which is estimated at about 24 million tonnes this year.

SURPLUS: A Reuters survey published in January showed the market had been expecting a deficit of 160,000 tonnes.

Analysts plan to review their forecasts but not until the damage to growth and demand can be gauged accurately.

STOCKS: Copper stocks in LME approved warehouses have climbed nearly 30% over the last few days to 233,150 tonnes.

Stocks of copper in warehouses monitored by the Shanghai Futures Exchange stood at 380,085 tonnes compare with below 135,000 tonnes in the middle of January.

STIMULUS: Investors have viewed action from the U.S. Federal Reserve and policymakers in Japan, Australia, New Zealand and elsewhere as insufficient given the spread of coronavirus across the world, which has forced many nations into lockdowns.

Fiscal stimulus from major economies around the world has also failed to reassure investors.

PERU: Prices of industrial metals had earlier been supported by moves to shutter or wind down mining operations in Peru and likely supply chain disruptions in neighbouring Chile, the world's top copper producer.

ENERGY: Falling costs of producing metal due to tumbling energy prices have lowered the floor for metal prices.

Oil prices fell to a 17-year low on Wednesday as travel and social distancing lockdowns sparked by the coronavirus epidemic knocked the outlook for demand.

OTHER METALS: Prices of aluminium, zinc lead , tin and nickel also all hit their lowest since 2016.

Aluminium was down 2.1% at $1,617, zinc slipped 0.3% to $1,866, lead rose 2.5% to $1,659 after falling earlier, tin fell 0.5% to $14,200 and nickel dropped 1.8% to $11,565 a tonne.