SMM: (LME) copper futures on the London Metal Exchange fell on Thursday as investor confidence was hit by the resurgence of the COVID-19 epidemic and more evidence of its impact on the economy.
Copper for three-month delivery fell 0.67 per cent, or $43.50, to settle at $6430.50 a tonne.
"I have a strong feeling that this V-shaped recovery is being questioned, or at least temporarily stalled," said Carsten Menke, an analyst at Julius Baer in Zurich.
The death toll of COVID-19 in Florida hit a record high for the third day in a row on Thursday, while the number of infections in Australia and India also reached record highs.
Data show that Germany, Europe's largest economy, shrank by a record 10.1% in the second quarter, while the US economy shrank at an annualised rate of 32.9% in the second quarter from the previous quarter, the biggest decline since the Great Depression.
Copper prices surged more than 50 per cent during the rebound from March lows to a two-year high of $6633 a tonne on July 13, partly because of concerns about supply conditions in Chile, the main producer.
"the copper supply disruption in Chile does not seem to be a reality," Menke said. Although they have been affected by the virus, they still seem to be in production, so the rally is fading. "
Prices are likely to fall sideways to a reasonable price of $6250 in the short term, he added.
The Shanghai Futures Exchange's main September aluminium contract hit a more than two-year high, closing 1.8 per cent higher at 14720 yuan a tonne, boosted by a stronger-than-expected recovery in China, the largest consumer.
Among other base metals, aluminum for three-month delivery fell 0.29 percent, or $5, to settle at $1720 a tonne, after hitting $1731.50, the highest since March 5.
Lead for the three-month period was flat, with a settlement price of US $1873 per tonne.
Zinc for three-month delivery fell 0.46 per cent, or $10.50, to settle at $2286.5 a tonne, hitting a six-month high of $2312.
Three-month nickel fell 1.08 per cent, or $150, to settle at $13726 a tonne;
Tin for three-month delivery fell 0.7 per cent, or $125, to settle at $17805 a tonne.
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