March 23, 2020 / 4:44 AM / 4 months ago

METALS-Shanghai copper drops to lowest since 2009 on demand concerns

(Updates prices, adds quotes)

By Mai Nguyen

SINGAPORE, March 23 (Reuters) - Shanghai copper prices dropped to their lowest in nearly 11 years on Monday as more shutdowns and restrictions imposed to curb the coronavirus outbreak deepened worries about a slowdown in global economic growth.

The most-active copper contract on the Shanghai Futures Exchange (ShFE) tumbled as much as 8% to 35,300 yuan a tonne, its lowest since June 23, 2009. It cut some losses to trade at 37,080 yuan a tonne by 0426 GMT.

Benchmark three-month copper on the London Metal Exchange (LME) was down 5.2% at $4,562.50 a tonne.

More countries are locking down cities, telling businesses to close, and imposing tighter restrictions on transportation to curb the transmission of the virus that has killed more than 14,500 people and infected nearly 338,000 globally.

"With global industrial activity slowing rapidly, with the exception of the restarting Chinese sector, the net demand for metals is bound to slow further and inventories build up, which in the short term can only result in more downward pressure on prices," said Malcolm Freeman of Kingdom Futures in a note.

FUNDAMENTALS

* TECHNICALS: LME copper may break a support of $4,418 a tonne this week and fall towards $3,727, said Reuters technical analyst Wang Tao.

* IMF: A top International Monetary Fund official said last week the impact of the pandemic would be "quite severe," but the global economy should weather the current shock.

* OTHER PRICES: LME aluminium fell 2.1% to $1,548.50 a tonne, nickel declined 1.1% to $11,100 a tonne, zinc decreased 1.3% to $1,823.50 a tonne, lead was down 1.7% at $1,630.50 a tonne and tin tumbled 6.3% to $13,070 a tonne.

* SHANGHAI PRICES: ShFE nickel declined 3.1% to 91,870 yuan a tonne, zinc fell 1.7% to 14,635 a tonne, tin was down 1.4% at 108,130 yuan a tonne, while aluminium dropped 4.6% to 11,425 yuan a tonne.

* HONGQIAO: China Hongqiao Group, the world's biggest aluminium producer, said lower costs boosted net profit by 12.7% in 2019 despite a sharp drop in output.

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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

ARBS ($1 = 7.0975 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Aditya Soni)

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