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METALS-Virus-hit copper heads for worst quarter since 2011

Kitco News

LONDON, March 31 (Reuters) - Copper prices rose on Tuesday after data showed an unexpected rebound in factory activity in China, but were set for their worst quarter since 2011 as the coronavirus outbreak shut down swathes of the global economy, reducing need for metals.

Benchmark copper was up 1.1% at $4,820.50 a tonne at 1157 GMT but down 22% over January-March.

Other industrial metals were between 10% and 20% lower in the first quarter.

Copper has steadied in the last week, helped by a stabilization of global equities market, a weakening of the U.S. dollar and the closure of some mines due to coronavirus lockdowns. But the hit to demand from coronavirus would dwarf its impact on supply, said Capital Economics analyst Kieran Clancy.

Copper could fall as low as $4,000 in the second quarter, he said. "It gets worse before it gets better, and the getting better part is dependent on these (virus) containment measures being lifted."

CHINA: In China, the world's biggest metals consumer, the official manufacturing PMI rose to 52 in March from a record low of 35.7 in February, but analysts cautioned that a durable near-term recovery was far from assured. China's economy could grow by as little as 0.1% this year, the World Bank said on Monday.

Slowdowns in other countries grappling with coronavirus outbreaks are likely to depress demand for Chinese exports.

IMPORT PREMIUMS: However, Chinese Yangshan import premiums at $65 are the highest since December.

FUNDAMENTALS: Capital Economics' Clancy said even with production stoppages so far announced the copper market could be oversupplied by 800,000 tonnes this year. In China, which is lifting lockdown measures, supply was returning quicker than demand, he said.

JIANGXI: China's biggest copper producer Jiangxi Copper said it aimed to churn out 6% more refined metal in 2020 than last year.

KGHM: Polish copper and silver producer KGHM is operating below its break-even point with copper below $5,000, Prime Minister Mateusz Morawiecki said.

RIO ALUMINIUM: Rio Tinto said it would close one of the aluminium production lines at its 340,000-tonne a year smelter in Tiwai, New Zealand.

VEDANTA ZINC: Vedanta Zinc International said it would suspend operations at its Skorpion Zinc mine and refinery in Namibia by the end of April.

PHILIPPINES NICKEL: Mining operations in the Philippines' southern province of Surigao del Norte, home to most of the country's nickel mines, will be suspended from April 1. PRICES: LME aluminium was down 0.1% at $1,528.50 a tonne, zinc was 0.8% higher at $1,886.50, nickel fell 0.1% to $11,310, lead gained 1.1% to $1,722 and tin was down 1.5% at $14,280.

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