Copper sinks to 2-week low as demand concerns resurface

• Benchmark copper on the London Metal Exchange was down 0.8% at $5,071 a tonne at 1043 GMT.
• Prices of the metal used widely in the power and construction industries earlier touched $5,060 a tonne, the lowest since April 22.

LONDON: Copper prices fell to their lowest in more than a week on Monday as worries resurfaced about shrinking demand in top consumer China and elsewhere due to the coronavirus and as some producers eased lockdown restrictions.

Benchmark copper on the London Metal Exchange was down 0.8% at $5,071 a tonne at 1043 GMT. Prices of the metal used widely in the power and construction industries earlier touched $5,060 a tonne, the lowest since April 22.

"The market is acknowledging that its going to take a long time to get to a situation where demand growth for metals year on year is flat," said Citi analyst Max Layton.

"In the interim, most metals will see surpluses, while those with supply disruptions will likely outperform."

VIRUS: More than 3.52 million people have been reported to be infected by the novel coronavirus globally and 246,910 have died, according to a Reuters tally.

INDUSTRY: Factory activity was ravaged across the world in April, business surveys showed, and the outlook looked bleak as government lockdowns froze global production and slashed demand.

A series of Purchasing Managers' Indexes (PMIs) from IHS Markit across Europe and Asia fell deeper into contraction last month, with many diving to all-time lows and others hitting levels last seen in the 2008-2009 financial crisis.

TEST MONTH: "As the global economy looks to escape its current lockdown, May is likely to be a test month and for that reason risk appetite is likely to remain muted at best," Marex Spectron said in a note.

"With China having been the recent marginal buyer of base metals, it takes a brave soul to espouse heavily shorting our complex ahead of their trading return on Wednesday."

China's Labour Day holiday spans May 1-5.

CHINA: Industrial production, investment, construction and loans data for May will be closely scrutinised for clues to demand in China, which accounts for half of global consumption of industrial metals.

SPREADS: Expectations of an oversupplied market in the short term can be seen in the discount for the cash over the three-month copper contract <CMCU0-3> at $29 a tonne compared with $3 a tonne on March 24.

PERU: Peru will gradually ease restrictions on key sectors including mining in May, the government said on Sunday. Activity had been paralysed since mid-March. Peru is the world's second largest producer of copper and is heavily dependent on the sector for economic growth.

OTHER METALS: Aluminium was down 0.7% at $1,476 a tonne, zinc slipped 0.8% to $1,898, lead ceded 1% to $1,613, tin shed 0.1% to $14,985 and nickel  fell 0.4% to $11,910.