On Friday, copper was on track for its worst weekly fall in five years as fears that the coronavirus would hit demand for metals in China increased.
Fears that the coronavirus would hit demand for metals in China increased on Friday (January 24), hurting base metals across the board.
On Friday, copper was on track for a weekly loss — its worst fall in five years. The metal started the five day period trading at US$6,244 per metric ton, then declined to US$6,048 by Thursday (January 23).
“If the outbreak is prolonged and deters activities after the New Year’s holidays, it will potentially impact copper demand and that is the main worry at the moment,” said ING Bank’s senior commodity strategist Wenyu Yao.
Despite hitting a two month high on Monday, zinc prices were also trending downwards on Friday. The metal was up at the beginning of the week as investors worried about historically low inventories.
According to Reuters, stocks of zinc in LME-approved warehouses are close to 20 year lows at about 50,000 metric tons, having been on a downtrend since October 2015.
Nickel’s performance was also down this past week, with the metal exchanging hands for US$13,840 per metric ton on Monday, falling to US$13,290 by Thursday.
The base metal’s output is on the rise, with top producer Indonesia reporting its production had doubled in 2019 to 52.8 million metric tons.
Meanwhile, lead had a volatile five day period, with prices starting the week at US$1,981 per metric ton to fall on Tuesday (January 21) to US$1,951. However, it was back up by Thursday when it exchanged hands for US$1,988.50.
China’s virus outbreak also weighed on iron ore prices this week, with the metal trading lower by Friday at US$94.35 per metric ton.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.