Copper slides as demand concerns resurface

LONDON: Copper prices fell on Thursday as worries about growth and demand were reinforced by the second wave of COVID-19 and lockdowns in Europe and as the market awaited the result of next week's US presidential election.

Benchmark copper on the London Metal Exchange was down 0.2% at $6,731 a tonne at 1003 GMT. Prices of the metal used widely in the power and construction industries are down nearly 5% since hitting 28-month highs last week.

"There has been an astounding deterioration in the coronavirus situation pretty much around the world, with the Far East being a notable exception," said ED&F Man Capital Markets' analyst Edward Meir.

Opinion polls on the US election show President Donald Trump's rival Joe Biden with a significant edge nationally, but his lead is tighter in battleground states.

"If Trump wins, metals could sell off because things will stay tense with China," Meir said. "Industrial metals will rally if Biden wins, he will be more conciliatory on all fronts. The dollar could weaken."

DOLLAR: A falling US currency makes dollar-priced commodities cheaper for holders of other currencies, which could boost demand and prices.

TECHNICALS: Copper is struggling to hold above support at $6,725-$6,730, where the 21-day moving average currently sits. A break below will see support at $6,690 the 50-day average.

TIN: Stocks of the soldering metal in LME registered warehouses at 4,575 tonnes are down more than 15% since Oct. 16 and at their lowest since August.

Worries about supplies on the LME market have created a premium for the cash over the three-month contract . It rose to $29 a tonne last week, the highest since late July and was last at $6 a tonne.

Three-month tin was down 0.2% at $17,900 a tonne.

ECB: The European Central Bank is expected to resist pressure to unveil fresh stimulus measures on Thursday but it is likely to pave the way for action in December.

OTHER METALS: Aluminium was down 0.7% at $1,797 a tonne, zinc was flat at $2,529, lead climbed 1.7% to $1,823 and nickel ceded 1.3% to $15,530.