Base metals ease on worries over second virus wave in China

Base metals ease on worries over second virus wave in China

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SINGAPORE — Most industrial metals fell on Monday as worries rose that a potential second wave of the novel coronavirus in China could lead to lower demand in the country.

Three-month copper on the London Metal Exchange (LME) fell 1.6% to $5,692 a tonne by 0706 GMT, recovering slightly from heavier losses earlier in the session.

The most-traded July copper contract on the Shanghai Futures Exchange (ShFE) ended down 0.9% at 46,280 yuan ($6,521.71) a tonne, having dropped as much as 1% in early trading hours.

After weeks with almost no new COVID-19 infections, Beijing has recorded dozens of new cases and is taking steps to halt the outbreak.

“I’m a bit worried, but not too much. The reaction speed and determination of the (Chinese) government are both much stronger (this time),” said a base metals trader.

STORY CONTINUES BELOW

LME aluminum declined 1% to $1,568.50 a tonne, nickel fell 1.5% to $12,470 a tonne, while ShFE aluminum rose 0.3% to 13,605 yuan a tonne and nickel dropped 1.2% to 100,290 yuan a tonne.

FUNDAMENTALS

* ALUMINIUM: China’s primary aluminum production edged higher in May from April on new smelting capacity and higher prices.

* CHINA: China’s industrial output rose in May but the gain was smaller than expected, while fixed asset investment in January-May fell less than in the first four months of 2020.

* COPPER: Copper trading on the CME and LME tumbled in May as funds and speculators reduced risk exposure, but volumes shot up in China as lockdowns were lifted.

* CHILEAN COPPER: Chilean copper miners’ unions called for a re-evaluation of the operational continuity plans of the country’s biggest miners during what they said was an “alarming” increase in coronavirus cases among workers.

* For the top stories in metals and other news, click or ($1 = 7.0963 yuan) (Reporting by Mai Nguyen; Editing by Uttaresh.V and Christopher Cushing)

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