Industrial metals slide on new COVID-19 variant jitters

LONDON: Prices of copper and other industrial metals fell on Friday over fears that a new and possibly vaccine-resistant coronavirus variant could derail global economic growth and sap demand.

Benchmark copper on the London Metal Exchange (LME) shed 2.9% to $9,474 per tonne in official trading. The metal, used to gauge global economic health, is headed for its second weekly decline.

The dollar gained while world stocks and oil prices fell as European and Asian countries tightened travel curbs after news of the new variant.

"The market is in risk-off mode due to this newly detected variant of coronavirus," said Amelia Fu, Head of Commodity Market Strategy at Bank of China International.

Little is known of the variant, detected in South Africa, Botswana and Hong Kong, but scientists say it may be able to evade immune responses and could be more transmissible.

A possible acceleration in monetary tightening by the US Federal Reserve also contributed to the sombre mood in the market and low liquidity due to the Thanksgiving holiday exaggerated price moves.

"Copper is still very tight, due to low stocks on LME and supply has not completely recovered and so prices could hold up fairly well even if economic growth slows," Fu said.

Copper rises as China supports its property sector

Market Balance: The copper market was in a 107,000 tonnes deficit in the first eight months of this year compared with a 97,000 tonnes deficit in the same period a year earlier, the International Copper Study Group said.

Inventories: Global stocks are climbing but remain at historically low levels.

Copper stocks at LME-registered warehouses available to the market climbed to 64,450 tonnes compared to 14,150 tonnes on Oct. 14.

In warehouses monitored by the Shanghai Futures Exchange, copper stocks jumped 19.9% to 41,862 tonnes, according to weekly data.

Other Metals: LME aluminium lost 3.7% to $2,617 a tonne, zinc shed 2.6% to $3,215, lead was down 0.5% to $2,258.50, tin eased 1.4% to $39,150 while nickel ceded 3% to $20,667.