London, March 31 – London Metal Exchange copper rose Tuesday after data showed a surprise rebound in factory activity in China, but recorded its biggest quarterly decline since 2011 as a result of a massive global economic halt caused by the coronavirus epidemic, reducing demand for metals.
At 17:00 on March 31, London time (00:00 on April 1, Beijing time), LME three-month copper rose 3.8% to $4951 per ton, the highest since March 18. But it fell about 20% in the first quarter.
Other industrial metals fell between 10% and 20% in the first quarter.
Copper prices recovered last week as global stock markets stabilised, the dollar weakened and some mines were closed due to the coronavirus outbreak.
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But Kieran Clancy, an analyst at capital economics, said the impact of the coronavirus epidemic on demand would overshadow its impact on supply.
He said copper could fall to $4000 in the second quarter. “Things will get worse before they get better, and part of the improvement depends on the lifting of these epidemic control measures.”
China’s official Manufacturing Purchasing Managers’ index (PMI), the world’s largest consumer of metals, rose to 52 in March from a record low of 35.7 in February, but analysts warned that China’s sustained economic recovery in the short term was far from certain.
China’s economy is likely to grow by only 0.1% this year, the world bank said on Monday. China’s slowdown in novel coronavirus may inhibit the demand for exports from other countries.
Clancy of Kaitou macro said that the copper market supply may be over 800000 tons this year.
He said China’s blockade is being lifted and supply is recovering faster than demand.
Jiangxi copper, China’s largest copper producer, said it planned to produce 1.65 million tons of cathode copper in 2020, up 6% from last year.
Chile’s copper output in February was 451580 tons, up 8.3% from a year earlier, the Chile Bureau of Statistics said Tuesday. The country is the world’s largest supplier of copper.
State owned polish copper group KGHM, one of the world’s leading producers of copper and silver, is now operating below break even as copper prices fall below $5000, Polish Prime Minister Vladimir moravitsky said on Monday.
Rio Tinto Ltd said Tuesday it would cut some operations of its tiwai smelter in New Zealand to ensure the health and safety of its workers and comply with government restrictions on the control of the new crown virus.
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Vedanta zinc international, a division of Vedanta Resources, a diversified miner, said Monday it would suspend operations of its Skorpion zinc mine and refinery in Namibia.
Novel coronavirus pneumonia (Surigao del Norte) project in southern Philippines will be suspended from April 1st, mineral company said on Tuesday, as one of the measures to prevent the spread of the new crown pneumonia epidemic.
LME three-month aluminum ended 0.3% lower at $1526 a tonne.
Three month zinc ended up 1.76% at $1905.50 a tonne.
Three month nickel ended up 1.45% at $11484 a tonne.
Three month lead ended up 2.2% at $1741.50 a tonne.
Three month tin rose 0.7% to $14602 a tonne.
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