Copper steady near two-year high, new coronavirus cases weigh

LONDON: Copper held steady near a two-year high on Monday, under pressure as new cases of the novel coronavirus threatened to stall any revival in the global economy and in metals demand.

Three-month copper on the London Metal Exchange was up 0.1% to $6,410.50 by 1750 GMT. A week ago the metal touched a peak of $6,633 a tonne, the highest since 2018, up from a low of $4,371 in March.

A rebound in the economy of top metals consumer China and supply disruptions, mainly in the world's main producing region South America, has boosted prices.

But a surge in cases of the coronavirus has thrown into doubt any quick rebound in the global economy, hitting copper, which is also used as a bellwether for economic health.

"Market prices are taking a breather here and it's too early to say if it's a trend reversal or a breather before prices move further," Commerzbank analyst Daniel Briesemann said.

SPREAD: Large holdings of copper warrants have fuelled concern about nearby supplies on the LME market.

This can be seen in the premium for the cash over the three-month contract which was last at $11.30 a tonne, its highest May 2019..

Also indicating tightness on the LME market are cancelled copper warrants - metal earmarked for delivery - at 40% of total stocks of 195,825 tonnes.

COPPER INVENTORIES: Copper stocks in LME-approved warehouses fell to a six-month low at 157,350 tonnes. Meanwhile, Shangai Futures Exchange inventories climbed 59% to 158,647 tonnes in three weeks by Friday, their highest since May 22.

OTHER PRICES: LME aluminium rose 0.1% to $1,663 a tonne, zinc was up 0.6% to $2,196, lead rose 0.8% to $1,829, tin gained 0.3% to $17,375 while nickel fell 0.3% to $13,180.