London copper eases as pandemic hits demand, supply worries limit losses

SINGAPORE: London copper prices eased on Wednesday from a three-week high hit in the previous session as the new coronavirus pandemic continued to dampen demand, but suspensions of mining operations in Africa and Latin America lent some support.

Three-month copper on the London Metal Exchange (LME) was down 0.1 per cent to $5,034.50 a tonne by 0702 GMT, after dropping as much as 1.5 per cent earlier in the session.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) rose 0.4 per cent to 40,810 yuan ($5,778.65) a tonne.


Sentiment took a hit as Spain reported higher coronavirus-related deaths for the first time in five days on Tuesday and the U.S. state of New York saw its single-highest daily loss of life.

The drop in metal prices, however, was capped by concerns over supply disruptions due to suspensions of copper mines across the world.

Glencore's Zambian unit Mopani Copper Mines said it would shutter its mines on Wednesday following disruption from the pandemic and low copper prices, and Panama ordered the temporary closure of Minera Panama, one of the region's top copper makers.

"If more mine operations are suspended, there could be a significant supply-demand imbalance, particularly since China has returned to work and some European countries have decided to restart some of their economies," said analyst Helen Lau of Argonaut Securities in a note.

The total mine production affected stands at about 540,000 tonnes, or nearly 3 per cent of global annual output, Lau said.

FUNDAMENTALS
COPPER: South Africa's strict lockdown has caused miners to divert copper from the country's ports to others in Africa, with Dar es Salaam the clear winner.

NICKEL: LME nickel rose 0.8 per cent to $11,565 tonnes and ShFE nickel climbed 1.9 per cent to 95,310 yuan a tonne after the Philippines' top nickel miners Nickel Asia Corp and Global Ferronickel Holdings Inc said they had suspended operations in a major mining region.

OTHER PRICES: LME zinc declined 0.3 per cent to $1,919 a tonne and lead fell 1.1 per cent to $1,717 a tonne, while aluminium was almost unchanged at $1,477 a tonne.

SHANGHAI PRICES: ShFE aluminium fell 0.1 per cent to 11,620 yuan a tonne, zinc dropped 1 per cent to 15,675 yuan a tonne and lead was down 1.2 per cent to 13,715 yuan a tonne.