Copper prices on the international market have continued falling to below the US $6,000 per metric tonne threshold to US $5,779 per tonne, its lowest since October, last year.
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.
According to the London Metal Exchange (LME), copper prices dropped to around US $6,158.58 by January 21, before plunging further to US $5,779 as at January 28, representing a loss of US $379.58 or around 6.17 per cent within a one-week period.
The continued price fall had continued to be influenced by investors’ fears that the new strain of the virus could negatively affect China’s economic growth and dampen demand for the commodity, according to Reuters.
“Copper fell for a ninth consecutive session on Monday (January 27), the longest losing streak in six years, as investors worried that a spreading Corona virus outbreak in China would hit demand in the world’s biggest metals consumer. Copper tumbled to its weakest in three months, with other industrial metals also sliding as investors took flight,” reports Reuters.
“The death toll from the virus rose to 81 on Monday as the government extended the Lunar New Year holiday and more big businesses shut down or told staff to work from home in an effort to curb the outbreak. Copper, regarded as a bellwether of the global economy, has given up all of its gains since early December when a rally pushed prices up nearly 10 per cent to eight-month highs as investors welcomed the first phase of a US-China trade deal and hoped for a rebound in economic growth.”
Chinese demand accounts for about 50 per cent of the majority of base metals, according to investment bank BMO Capital.
The virus, also known as 2019-nCoV, is understood to be a new strain of Corona virus that had 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 4,515 confirmed cases in China compared to just 218 confirmed cases of the virus a fortnight ago, with over 100 deaths recorded so far.