Copper drifts lower in thin trading as coronavirus cases rise

LONDON: Copper prices moved lower on Wednesday in depleted volumes as the end of the year approaches, pressured by surging coronavirus infections driven by a new variant of the virus.

Three-month copper on the London Metal Exchange (LME) slipped 0.6% to $7,815.50 a tonne in official trading, having gained 27% this year as top metals consumer China unleashed heavy stimulus spending on infrastructure.

"We've just come into some sort of vacuum, with people out of the markets right now. It's another strange day with erratic action and speculators driving it one way or the other," said Robert Montefusco at broker Sucden Financial.

"I think there are good prospects of going higher next year, but we're not out of the woods yet with this pandemic."

Lockdown measures in England will be extended to counter the rapidly growing number of cases of a new variant of COVID-19 while the first known US case of the variant was detected. In China, the most-traded February copper contract on the Shanghai Futures Exchange closed 0.2% down at 58,480 yuan ($8,957.78) a tonne.

"Most investors are just sitting on their hands waiting for this year to finish to close their books and have another go in 2021," said commodities broker Anna Stablum at Marex Spectron in Singapore.

Supporting metals was a weaker dollar index, which slumped to two-year lows. A weaker dollar makes commodities priced in the US currency cheaper for buyers using other currencies.

Metals failed to follow the lead of world stock markets, which edged closer to record highs as investors bet on a strong economic recovery next year, helped by news that the coronavirus vaccine developed by Oxford University and AstraZeneca became the second to be approved by Britain.

LME aluminium rose 0.3% to $1,997 a tonne, zinc added 0.4% to $2,772.50, lead dipped 0.2% to $1,981.50, nickel shed 0.5% to $16,838 and tin was down 0.6% at $20,270.