Copper in longest down streak for 6 years
Copper fell for a ninth consecutive session on Monday, the longest losing streak in six years, as investors worried that a spreading coronavirus outbreak in China would hit demand in the world's biggest metals consumer.
Copper tumbled to its weakest in three months, with other industrial metals also sliding as investors took flight.
The death toll from the virus rose to 81 on Monday as the government extended the Lunar New Year holiday and more big businesses shut down or told staff to work from home in an effort to curb the outbreak.
Copper, regarded as a bellwether of the global economy, has given up all of its gains since early December when a rally pushed prices up nearly 10 per cent to eight-month highs as investors welcomed the first phase of a US-China trade deal and hoped for a rebound in economic growth.
"Chinese demand accounts for about 50 per cent of the majority of base metals," said BMO Capital analyst Timothy Wood-Dow, noting the spread of the virus.
"On Friday, we didn't know this, it seemed quite contained. Now this wider geographical spread is very concerning, so that's feeding through to the market."
Wood-Dow added that Chinese economic growth could still hit 6 per cent this year if the virus is contained, aided by the government's determination to bolster the economy.
"Probably infrastructure investment will just be pushed back to later in the year."
Benchmark three-month copper on the London Metal Exchange dropped 3.1 per cent in final open-outcry trading to $US5,743 a tonne, its lowest since October 18.
LME copper last week posted its steepest weekly loss in five years, falling 5.5 per cent, as the virus spread.
"Fingers crossed we will get good earning reports this week from US companies or else the panic selling will be even worse," said one base metals trader who asked to remain anonymous.
LME nickel prices shed 2.8 per cent to close at $US12,615 a tonne, its lowest since July 9. The net speculativeshort position on the LME had risen to 2.9 per cent of open interest last Thursday, according to Marex Spectron estimates.
"Whilst modest in size, this is a level not seen in nickel since January 2019," the broker's Alastair Munro said in a note.
On-warrant LME lead inventories - material not earmarked for delivery - fell to 50,025 tonnes, the lowest since July 26 last year, daily LME data showed.
The premium for cash LME lead over the three-month contract rose to $US12 a tonne, the highest since October 31, indicating tighter supplies. It has moved from a discount of $US21.25 two weeks ago.
LME three-month lead slipped 2.5 per cent to close at $US1,892 a tonne after touching $US1,870, its weakest since December. 9.
* PRICES: LME aluminium finished 1 per cent down at $US1,764, its lowest in nearly six weeks. Zinc tumbled 4.3 per cent to $US2,240, the lowest since December16, and tin dropped 3.4 per cent to $US16,270, its weakest in nearly two months.
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