Copper range-bound amid coronavirus uncertainty

• Three-month copper on the London Metal Exchange (LME)  edged up 0.1pc to $5,753 a tonne by 0502 GMT.
• Copper inventories in warehouses tracked by ShFE climbed to their highest since May 2019 at 206,254 tonnes by the end of last week.
• LME aluminium was flat at $1,734 a tonne, nickel rose 0.3pc to $13,145 a tonne, zinc advanced 0.8pc to $2,165 a tonne and lead advanced 0.3pc to $1,855 a tonne.

Copper prices moved in a tight range on Tuesday as uncertainty over the economic impact of a coronavirus outbreak offset optimism around news that the that the spread of the virus may be slowing and might be over by April.

Three-month copper on the London Metal Exchange (LME)  edged up 0.1pc to $5,753 a tonne by 0502 GMT, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) was nearly flat at 45,630 yuan ($6,553.49) a tonne.

The epidemic could be over by April, a Chinese senior medical adviser said, while the number of new cases in the country fell to the lowest since late January, brightening markets' mood.

However, international experts remained alarmed by the spread, and concerns remained around the impact that the virus could have on factory activity and consumer spending in the world's second-largest economy.

"Delayed construction and shutdowns could constrain demand for industrial metals in Q1. The current (virus) outbreak will be a major drag to global demand," ANZ said in a note.

"That said, this softer demand backdrop has been largely factored into prices. Chinese government monetary easing should favour demand recovery in Q2 and Q3," ANZ said.

FUNDAMENTALS

SHFE COPPER STOCKS: Copper inventories in warehouses tracked by ShFE climbed to their highest since May 2019 at 206,254 tonnes by the end of last week, latest exchange data showed.

BONDED WAREHOUSE STOCKS: Copper stockpiles in China's bonded warehouses this month rose to their highest since August last year at 299,500 tonnes, monthly data by Shanghai Metals Market showed.

PRICES: LME aluminium was flat at $1,734 a tonne, nickel rose 0.3pc to $13,145 a tonne, zinc advanced 0.8pc to $2,165 a tonne and lead advanced 0.3pc to $1,855 a tonne.

SHFE PRICES: Aluminium dipped 0.2pc to 13,745 yuan a tonne, nickel was down 0.3pc to 105,740 yuan a tonne, zinc eased 0.1pc to 17,095 yuan a tonne while lead rose 0.9pc to 14,165 yuan a tonne.