Copper prices slide, demand worry dominates mood
- Benchmark copper on the London Metal Exchange was down 1.9% at $7,975 a tonne.
- There has been a fair amount of profit-taking on long positions," a copper trader said. "The dollar and China's coronavirus cases triggered the sell-off, but copper has come a long way since (early) last year.
LONDON: Copper prices fell on Monday as demand worries fuelled by surging coronavirus cases in top consumer China were reinforced by a higher dollar and rising China-US tensions.
Benchmark copper on the London Metal Exchange was down 1.9% at $7,975 a tonne at 1207 GMT. Prices of the metal used widely in the power and construction industries touched $8,238 on Friday, the highest since February 2013.
"There has been a fair amount of profit-taking on long positions," a copper trader said. "The dollar and China's coronavirus cases triggered the sell-off, but copper has come a long way since (early) last year."
Copper prices fell to four-year lows of $4,371 in March last year as coronavirus lockdowns hit manufacturing activity.
VIRUS: Mainland China saw its biggest daily increase in COVID-19 cases in over five months as new infections in Hebei province jumped and a county in northeastern Heilongjiang province moved into lockdown.
"Aside from Hebei's battle with the new COVID-19 strain, cold weather is threatening to slow China's industrial production if only short term," analysts at Marex Spectron said in a note.
"Then we also have Chinese new year holidays ahead of which Chinese risk appetite and physical demand should lessen."
China's Lunar new year holiday runs between Feb. 11 and 17, but factory activity starts to slow ahead of the break and takes time to ramp up afterwards.
DOLLAR: A higher US currency makes dollar-denominated metals more expensive for holders of other currencies, which potentially would subdue demand
TAIWAN: China condemned the United States for scrapping curbs on interactions with Taiwan officials, saying nobody could prevent the country's "re-unification".
ALUMINIUM: The discount for the cash over the three-month aluminium contract flipped briefly into a premium on concern about supplies on the LME market.
Supply worries have been fuelled by falling stocks of aluminium in LME registered warehouses and large holdings of warrants.
Three-month aluminium was down 0.6% at $2,009.
OTHER METALS: Zinc slipped 0.9% to $2,787 a tonne, lead ceded 0.5% to $1,992, tin was down 0.9% at $20,800 and nickel shed 1.8% to $17,340.
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