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Copper Slips on Rising Virus Cases, Economic Worries

LONDON, July 30 (Reuters) - Copper prices slipped on Thursday as investor confidence was hit by a resurgence of coronavirus cases and more evidence of the economic impact of the pandemic.

“I have the strong feeling that this V-shaped recovery is being questioned, or at least taking a pause,” said analyst Carsten Menke at Julius Baer in Zurich.

The three most populous U.S. states set one-day records for COVID-19 deaths on Wednesday, while Australia and India reported record daily coronavirus infections on Thursday.

In Europe, shares fell on dismal earnings reports and data showing Europe’s biggest economy Germany had shrunk by a record 10.1% in the second quarter.

Benchmark copper on the London Metal Exchange was down 0.5% at $6,443 a tonne by 0954 GMT.

It had surged more than 50% during a rebound from lows in March to a two-year peak of $6,633 a tonne on July 13, partly due to worries about supply from top producer Chile.

“The copper supply disruptions in Chile do not seem to be materialising. Even though they are being affected by the virus, they seem to be keeping production up, so some of this bullishness is fading,” Menke said.

Prices are likely to move sideways to slightly lower in the short term, with $6,250 fair value, he added.

* SHANGHAI ALUMINIUM: The most-traded September aluminium contract on the Shanghai Futures Exchange hit a more than two-year high, ending up 1.8% at 14,720 yuan a tonne, on a better-than-expected recovery in top consumer China.

* DOLLAR: The dollar index rebounded from more than two-year lows, making metals priced in the U.S. currency more expensive for buyers using other currencies.

* PRICES: LME aluminium shed 0.4% to $1,718 a tonne, zinc dropped 0.2% to $2,291.50, lead gave up 0.2% to $1,869, nickel fell 0.3% to $13,830, and tin added 0.1% to $17,945.

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($1 = 7.0026 yuan)

(Additional reporting by Mai Nguyen in Singapore; Editing by Jan Harvey)

 

Source: Reuters

 


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