Off The Wire
METALS-Copper in longest losing streak in 6 years on China virus fears
* Nickel slides to 6-1/2 month low
* Copper on course for ninth consecutive session of falls (Updates with official prices) By Eric Onstad LONDON, Jan 27 (Reuters) - Copper was on track for its ninth consecutive session of falls on Monday, the longest losing streak in six years, as investors worried that a spreading Chinese coronavirus would hit demand in the world's biggest metals consumer. Copper tumbled to the weakest in three months and other industrial metals also slid as investors fled.
The death toll from the virus outbreak in China 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 spread. 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% to eight-month highs as investors welcomed the first phase of a U.S.-China trade deal and hoped for a rebound in economic growth.
"Chinese demand accounts for about 50% of the majority of base metals and looking at the latest data regarding the coronavirus, it's now spread quite widely," said analyst Timothy Wood-Dow at BMO Capital in London. "On Friday, we didn't know this, it seemed quite contained. Now this wider geographical spread is very concerning, so that's feeding through to the market." It was possible that Chinese economic growth could still hit 6% this year if the virus is contained since the government was determined to bolster the economy, he added. "Probably infrastructure investment will just be pushed back later in the year."
Benchmark three-month copper on the London Metal Exchange (LME) hit its lowest since Oct. 18 at $5,775 a tonne. It failed to trade in official open-outcry activity and was bid down 2% at $5,808 a tonne. Last week, LME copper posted its steepest weekly loss in five years, falling 5.5%, as the virus spread. "Fingers crossed we will get good earning reports this week from U.S. companies or else the panic selling will be even worse," a base metals trader, who asked not to be named, said.
* NICKEL: LME nickel prices shed 1.8% in official rings to trade at $12,745 a tonne, the lowest since July 10. The net speculative short position on the LME had risen to 2.9% of open interest as of last Thursday, according to Marex Spectron. "Whilst modest in size, this is a level not seen in nickel since January 2019," the broker's Alastair Munro said in a note.
* LEAD STOCKS: On-warrant LME lead inventories - material that is not earmarked for delivery - fell to 50,025 tonnes, the lowest since July 26 last year, daily LME data showed. The premium of cash LME lead over the three-month contract rose to $12 a tonne, the highest since Oct. 31 last year, indicating tighter supplies. It has moved from a discount of $21.25 two weeks ago.
LME three-month lead slipped 3% to $1,881 a tonne in
* PRICES: LME aluminium was bid down 1% to a near six-week low of $1,764 a tonne, zinc was bid down 2.7% to $2,277 and tin was bid down 1.6% to $16,575 a tonne. Both zinc and tin hit three-week lows.
* For the top stories in metals and other news, click or (Additonal reporting by Mai Nguyen in Hanoi and Zandi Shabalala in London; Editing by Kirsten Donovan)
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