By Eileen Soreng
Nov 26 (Reuters) – London copper prices fell on Friday, as a newly identified COVID-19 variant in South Africa fuelled concerns over its impact on economic growth.
Three-month copper on the London Metal Exchange CMCU3 fell 1% to $9,706 a tonne by 0555 GMT. The most-traded January copper contract on the Shanghai Futures Exchange SCFcv1 fell 1.5% to 70,850 yuan ($11,085.56) a tonne.
South African scientists have detected a new COVID-19 variant in small numbers that might make vaccines less effective and prompted Britain to introduce travel restrictions on South Africa and five neighbouring countries.
Stocks suffered their sharpest drop in three months in Asia on reports of the new variant, driving investors towards the safety of bonds, the yen and the dollar. MKTS/GLOB
“I think it’s still early days to really see if there’s any impact on the physical side of the (metals’) business,” a Singapore-based trader said.
There is enough upside for copper prices with the physical availability of the metal being pretty scarce, the trader said adding, for 2022 the demand picture looks questionable with buyers becoming cautious with the prices rising “too quickly.”
On-warrant LME copper inventories MCUSTX-TOTAL though edged up to 62,950 tonnes, is still down nearly 74% from 238,725 tonnes in August. Prices have risen 25% this year.
Copper stocks in ShFE-registered warehouses CU-STX-SGH were at 34,918 tonnes, the lowest since June 2009.
Copper is often used as a gauge of global economic health due to its widespread application in many sectors.
FUNDAMENTALS
* LME aluminium CMAL3 fell 1.3% to $2,681 a tonne, nickel CMNI3 was down 0.8% at $20,495 a tonne, and lead CMPB3 edged 0.2% higher to $2,275 a tonne.
* LME tin CMSN3 was unchanged, having scaled a record peak of $40,680 a tonne on Thursday amid tight supply.
* “Tin prices will remain on an uptrend in the coming weeks as policy uncertainty from top exporter Indonesia roils the market,” Fitch Solutions said in a note.
* ShFE aluminium SAFcv1 fell 1.1% to 19,215 yuan a tonne, nickel SNIcv1 was down 2.5% at 150,750 yuan a tonne, lead SPBcv1 gained 0.8% to 15,330 yuan a tonne, zinc SZNcv1 dipped 1% to 23,520 yuan a tonne and tin SSNcv1 shed 1.7% to 285,080 yuan a tonne.
* A handful of local COVID-19 cases in eastern parts of China have prompted Shanghai city to limit tourism activities and a nearby city to cut public transportation services.
* Communities in Peru’s Ayacucho region say they will resume protests against the mining sector if the government breaches what they call a signed agreement to shutter mines, local leaders told Reuters.
* For the top stories in metals and other news, click TOP/MTL or MET/L
($1 = 6.3912 Chinese yuan renminbi)
(Reporting by Eileen Soreng in Bengaluru; Editing by Kim Coghill, Subhranshu Sahu and Shailesh Kuber)
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