Copper prices on the international market have markedly fallen in the last one week to around US $6,150 per metric tonne since the outbreak of the deadly Corona virus in China.
While copper prices started the New Year on a bullish note, trading at over US $6,300 per tonne amidst optimism of the US-China trade deal breakthrough, prices of the red metal had significantly dropped in the one-week period since news of the deadly Corona virus outbreak.
According to the London Metal Exchange (LME) copper prices hit a high of US $6,300.50 per tonne by mid-January, only to slide to around US $6,158.58 by January 21, representing a loss of US $142 or around 2.26 per cent.
The sudden price reduction was influenced by investors’ fears that the new strain of the virus could negatively affect China’s economic growth, according to Reuters.
“Copper prices slumped on Tuesday as investors liquidated recent bullish positions over fears that a new strain of Corona virus in China could hit economic growth in the world’s top metals consumer. The metal often used as a gauge of economic health also suffered after inventories in London Metal Exchange-registered warehouses jumped by a third overnight, providing a boost to supplies in LME depots after months of erosion,” reports Reuters.
It added that the escalating death toll was also affecting confidence.
“The death toll from a mysterious flu-like virus in China climbed to six on Tuesday as new cases surged beyond 300, with fears of further outbreaks as millions of Chinese travel for the Lunar New Year holiday. Many Chinese traders are also closing their positions before taking time off for the holiday. ‘The sector is taking a bit of a tumble. Even though it’s on a relatively small scale right now, it (the virus) just hits confidence, having a dampening impact on the otherwise risk-on climate that we’ve had so far this year’,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, Denmark, cited by Reuters.
The virus, also known as 2019-nCoV, is understood to be a new strain of Corona virus that has not previously been identified in humans.
It is believed to have originated from infected animals at a seafood and wildlife market in Wuhan, a central Chinese city of 11 million people, late last year.
There are currently 218 confirmed cases of the virus in China, according to the WHO, with nine deaths confirmed so far, according to the BBC.