Copper was on track for its biggest monthly fall in over four years as fears that the coronavirus outbreak could hurt Chinese demand increased.
Despite edging up on Friday (January 31), copper was under pressure this week due to expectations of slower demand in China, the world’s top consumer, as the coronavirus outbreak continues to spread. The red metal is on track to hit its biggest monthly fall in over four years.
The coronavirus outbreak, which has killed more than two hundred and infected thousands, was declared a global health emergency by the World Health Organization on Thursday (January 30). The virus could slow Chinese growth 5 percent, according to a government economist.
“While we believe that the 2019-nCoV will likely be better managed by the Chinese authorities and is likely to prove less of a public health threat, we still see downside risks to the economy from the epidemic,” Fitch Solutions said in a note.
Copper started the week trading at US$5,778 per metric ton and ended the week at US$5,620. The first month of the year saw prices decline more than 8 percent.
“While the degree of damage to the economy and to metals demand remains unknown, clearly the short-term picture has darkened,” ING analysts said in a note.
Despite trading upwards for most of January, zinc prices were also on track for a monthly decline. The base metal that is used to galvanize steel saw its steepest loss these past two weeks, falling from US$2,466 per metric ton on January 22 to US$2,234.50.
Lead started the five day period trading at US$1,900 per metric ton, only to fall to US$1,835 by the end of the week. The metal, which saw a price spike mid-month when it jumped from US$1,896 on January 14 to US$2,026 on January 16, was also headed for a monthly loss.
Nickel suffered the same fortunes as its base metals counterparts, with prices falling more than 10 percent in January. Nickel started the week trading at US$12,630 per metric ton to end at US$12,530.
Meanwhile, iron ore was headed for a monthly gain. Prices started January trading at US$91.53 per metric ton and finished at US$92.90.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.