February 28, 2020 / 5:12 AM / a month ago

METALS-London zinc heads for worst week since Sept 2015 as virus spreads

(Recasts, updates prices)

By Mai Nguyen

Feb 28 (Reuters) - Base metals dropped on Friday as a rapid spread of the coronavirus outbreak stoked concerns of a pandemic and global recession, with London zinc on track for its biggest weekly fall since September 2015 amid high inventories.

The epidemic, which started in China, has spread to around 50 countries and disrupted global economic activities.

World share markets were headed for their worst week since the depths of the 2008 financial crisis on pandemic fears, despite China reporting the least new cases since Jan. 23.

"Sentiment is weak across the board. Everyone is afraid," said a base metals trader.

Benchmark three-month zinc on the London Metal Exchange (LME) fell as much as 2.1% to $1,970.50 a tonne, its lowest since June 2016. The contract was down 6.3% on a weekly basis by 0724 GMT, on track for its biggest drop since September 2015.

The most traded zinc contract on the Shanghai Futures Exchange (ShFE) dropped as much as 5% to 15,600 yuan ($2,224.50) a tonne, its lowest since June 2017.

FUNDAMENTALS

* ZINC STOCKS: ShFE zinc stocks ZN-STX-SGH jumped to 160,011 tonnes, their highest since April 2017, while LME zinc stocks MZNSTX-TOTAL have been hovering around their highest level since August 2019, latest exchange data showed.

* ALUMINIUM: Russian aluminium group United Company Rusal said the virus would hit the Chinese market in the first half of this year, with weak demand and a bigger supply surplus.

* PRICES: LME nickel fell 1.5% to $12,185 a tonne, aluminium hit its lowest in 40 months at $1,665 a tonne, copper slipped 1.1% to $5,552 a tonne and lead was down 0.8% at $1,795 a tonne.

* SHFE PRICES: ShFE copper declined 2.6% to 44,180 yuan a tonne, aluminium dropped 2.6% to 13,060 yuan a tonne and nickel fell as much as 2.9% to a seven-month low of 98,200 yuan a tonne.

* CHINA: China should stockpile some non-ferrous metals to take the pressure off producers whose sales have been drying up because of the outbreak, the China Nonferrous Metals Industry Association said.

* IMF: The International Monetary Fund is likely to downgrade global economic growth forecast due to the virus, its spokesman said.

* For the top stories in metals and other news, click or

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 7.0128 Chinese yuan Reporting by Mai Nguyen; Editing by Subhranshu Sahu and Maju Samuel

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