HANOI, Jan 12 (Reuters) - Shanghai copper fell on Tuesday to a one-week low, hit by demand concerns amid new curbs to fight a resurgence of coronavirus cases in China, the world’s biggest metals consumer.
The most-traded March copper contract on the Shanghai Futures Exchange closed down 1.3% at 58,710 yuan ($9,082.47) a tonne, after earlier losing as much as 2.5% to 57,960 yuan, its lowest since Jan. 5.
ShFE aluminium ended down 1.4% at 14,955 yuan a tonne, nickel eased 0.1% to 129,920 yuan and zinc fell 1.2% to 20,885 yuan.
China reported 55 new virus infections on Monday, down from 103 the previous day for the biggest daily increase in more than five months, sparking concerns that China-led demand recoveries might be dampened due to restrictions imposed to curb the outbreak.
“The increase in cases did spook markets in China. Copper’s decline comes together with USD strength and the build-up of steel inventories in China..., a reflection of (seasonal) industrial activity slowdown,” said a metals trader based in Singapore.
“We’re at a healthy level. Downside is likely $50 on stronger USD while upside is $300, barring any further pandemic in China,” said the trader, pointing to prospects of further stimulus in the United States.
A stronger U.S. dollar makes greenback-priced metals on the London Metal Exchange more expensive to holders of other currencies.
LME three-month copper advanced 1.5% to $7,980 a tonne by 0721 GMT, while aluminium edged up 0.1% to $2,010.50 a tonne, nickel jumped 3.6% to $17,705 a tonne and lead advanced 1.3% to $1,991 a tonne.
* Copper inventories in LME warehouses MCUSTX-TOTAL rose for the first time since Dec. 4, 2020 to 104,950 tonnes, while the discount of LME cash copper to the three-month contract CMCU0-3 expanded to $14.25 a tonne, the biggest since Jan. 4.
* Rio Tinto-controlled Turquoise Hill Resources said Mongolia’s government was considering terminating the companies’ underground expansion of their Oyu Tolgoi copper mine project due to rising development costs.
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$1 = 6.4641 yuan Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips, Shailesh Kuber and Subhranshu Sahu