February 6, 2020 / 7:57 AM / 13 days ago

METALS-Copper rises as China's transport curbs raise supply concerns

 (Updates prices)
    By Mai Nguyen
    Feb 6 (Reuters) - Copper prices rose on Thursday, driven by
concerns about a  potential supply shortage of refined metals
due to transport restrictions in China aimed at containing a
virus outbreak. 
    Three-month copper on the London Metal Exchange (LME)
        rose as much as 1.6% to $5,813.50 a tonne, the highest
since Jan. 27. The contract pared some gains to trade 0.7%
higher at $5,762.50 a tonne by 0755 GMT.
    LME aluminium         rose 0.3% to $1,722.50 a tonne and
zinc         increased 0.3% to $2,220 a tonne.
    "Not only is the demand side impacted, but also the supply
side. If the outbreak situation does not improve, some smelters
may consider cutting production," said a China-based metals
analyst.
    China's February refined copper output could fall by more
than 15% month-on-month, while zinc production could also drop
if transport restrictions are not eased soon, said research
house Antaike, adding that nickel output in January fell 33.4%
from a month earlier.                          
    Some ports in China are congested with less working labour
amid the outbreak.             
    China's move to cut import tariffs on U.S. goods also
boosted sentiment.             
    The most-traded copper contract on the Shanghai Futures
Exchange          closed up 1.4% at 46,040 yuan ($6,603.94) a
tonne, while aluminium          advanced 0.4% to 13,670 yuan a
tonne and zinc          edged up 0.2% to 17,335 yuan a tonne.
    "All my previously booked vessels out of China have to be
postponed," said a base metals trader based in Singapore.
"Nothing can be guaranteed now, even the new shipment schedule.
I am not the only one getting affected."
    However, the trader warned that the price rally might not
last as downstream users cutting output due to supply shortage
could hurt economic growth, citing Hyundai Motor's            
production suspension in South Korea as an example.             
    
    FUNDAMENTALS
    * TOLL: Another 73 people on the Chinese mainland died due
to the coronavirus outbreak, the highest daily increase, taking
the total death toll from the virus to 563.             
    * SCRAP: China issued import quotas for another 4,620 tonnes
of high-grade copper scrap and 1,440 tonnes of aluminium scrap
for use in 2020.             
    * For the top stories in metals and other news, click       
          or             
        
    PRICES    
    Three month LME copper                  
    Most active ShFE copper                  
    Three month LME aluminium               
    Most active ShFE aluminium               
    Three month LME zinc                    
    Most active ShFE zinc                    
    Three month LME lead                    
    Most active ShFE lead                    
    Three month LME nickel                 
    Most active ShFE nickel                   
    Three month LME tin                     
    Most active ShFE tin                             
    
    ARBS
                
                
                
                
                




($1 = 6.9716 Chinese yuan renminbi)

 (Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips and
Aditya Soni)
  
 
 
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