Rebound in copper fades as virus spreads
Copper prices retreated from highs overnight as cases of the coronavirus in top metals consumer China continued to climb and health officials dashed hopes of a breakthrough treatment.
Benchmark copper on the London Metal Exchange had bounced by about 5 per cent so far this week after touching a five-month low on Monday, but pulled back in European trading on Thursday.
"We simply have run out of steam. The markets are probably starting to ask the questions again - basically that this is not going to be over anytime soon," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"Yesterday we had a very strong move, mostly based on hopes we might be closer to a treatment, but with numbers still rising in China and copper being at the epicentre of the market risk to China's current slowdown, copper ran as far as it could."
The World Health Organization played down media reports on Wednesday of "breakthrough" drugs being discovered to treat people infected with the new coronavirus.
Three-month LME copper rose as much as 1.6 per cent on Thursday to $US5,813.50 a tonne, the highest since January 27, but gave up most of its gains by the close. Copper was up 0.2 per cent at $US5,735 in final open-outcry activity.
Hansen expects LME copper to stabilise in a range between $US5,800 and $US5,550, broadly this week's highs and lows. A break on the downside would fuel further selling since that area had been a solid floor from late 2016 to mid-2017.
Copper would be supported by concerns about potential supply shortage of refined metals due to transport restrictions in China aimed at containing the virus outbreak, analysts said.
Some ports in China are congested amid the outbreak.
"All my previously booked vessels out of China have to be postponed," said a base metals trader based in Singapore. "Nothing can be guaranteed now, even the new shipment schedule. I am not the only one getting affected."
Another 73 people on the Chinese mainland died due to the coronavirus outbreak, the highest daily increase, taking the total death toll from the disease to 563.
The first battery-grade nickel and cobalt project in Indonesia using high-pressure acid leaching technology could start commissioning in the second half of 2020, consultancy firm CRU Group said.
LME nickel gave up 0.8 per cent to end at $US13,060 a tonne.
China issued import quotas for another 4,620 tonnes of high-grade copper scrap and 1,440 tonnes of aluminium scrap for use in 2020.
LME aluminium rose 1.2 per cent to close at $US1,737 a tonne, zinc shed 0.3 per cent to $US2,207, lead climbed 1.3 per cent to $US1,844 and tin gained 0.8 per cent to $US16,700.
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