Copper prices rebounded on Tuesday from the lows of more than three years earlier, as cases of coronaviruses in China fell. Furthermore, countries around the world are preparing to take stimulus measures to contain the economic impact of the virus outbreak. The United States, Japan, and other countries announced their plans to stop the effect of the virus and support economic growth. Other industrial metals also rebounded, along with oil.
After an abrupt decline in new cases in mainland China during the past week, Chinese president, Xi Jinping, visited the city of Wuhan, the epicentre of the outbreak. It also encouraged improved confidence.
Copper on the London Metal Exchange (LME) closed at a profit of 0.6% at $ 5,566 per ton, after collapsing to $ 5,433 on Monday, its lowest level by more than three years.
Factories in China slowly recovered their activity, which raised hopes of an improvement in demand. Business and travel activities are improving steadily. But the rapid increase in global infections will present a challenge to the broader economic recovery in the Asian country.
Copper production in Codelco, the world’s largest copper miner, fell 6.8% year-on-year in January. While that of the BHP Group – the world’s largest copper mine – improved 10%.
Coronavirus still causes uncertainty in the market
Copper prices sank on Tuesday as uncertainty about the economic impact of an identified coronavirus outbreak in China contained optimism for a sharp drop in new cases of infected people.
China reported on Wednesday its lower number of new cases of coronavirus since late January. Which gives credit to the prediction of the country’s leading medical advisor that the outbreak could end in April.
World markets were encouraged by this perspective. However, international experts remain alarmed by the spread of the flu-like virus that has already killed more than 4,300 people. Coronavirus has reached more than 80 countries so far, and more than 119, 389 people have been infected. The death toll rose to 3,158 in China. Italy has the most significant number of proved cases outside of China. Ten thousand one hundred forty-nine people have been infected in the country. The death toll reached 31 in the United States. Fears of virus transmission disturb daily life and economic activity in unusual and unpredictable ways.
The inventories of the copper in deposits followed by the ShFE amounted to 206,254 tons at the end of last week, maximum since May 2019, according to the most recent operators.