HANOI, Feb 3 (Reuters) - Shanghai copper prices fell to their lowest in eight weeks on Wednesday, while prices also fell in London, as investors were concerned about demand ahead of a major holiday in China.
The most-traded March copper contract on the Shanghai Futures Exchange dropped as much as 1.3% to 56,860 yuan ($8,804.31) a tonne, its lowest since Dec. 9, before closing at 57,000 yuan a tonne, still down 1.1%.
Three-month copper on the London Metal Exchange shed 0.5% to $7,742 a tonne by 0741 GMT.
“Copper market headwinds are gathering. A lockdown of some regions in Beijing has raised concern that demand will be impacted. This comes ahead of the normal seasonal slowdown around the Chinese Lunar New Year,” said ANZ in a note.
“A softening of the PMI (purchasing managers index), as well as a downturn in the credit cycle has also weighed on the market,” ANZ said.
China, the world’s biggest metal consumer, will celebrate its Lunar New Year holiday during Feb. 11-17, when metals demand usually dip as business activities slow.
Meanwhile, a recent coronavirus outbreak in China has dampened the country’s economic activities in January, dragging factory output and service activities growth to multi-month lows.
LME nickel dropped 0.6% to $17,590 a tonne, lead declined 0.3% to $2,010 a tonne while ShFE nickel dropped 1.8% to 129,630 yuan a tonne and ShFE tin shed 2.5% to 164,180 yuan a tonne.
* Yangshan copper premium SMM-CUYP-CN rose to its highest since August 2020 at $73 a tonne, amid disrupted supplies from top producer Chile.
* LME cash copper was last at a $10-a-tonne premium over the three-month contract CMCU0-3, a level unseen since September 2020, indicating tight supplies of nearby contracts.
* LME lead inventories fell to their lowest since July 2020 at 94,625 tonnes.
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$1 = 6.4582 yuan Reporting by Mai Nguyen; Editing by Rashmi Aich and Uttaresh.V