Copper prices slipped overnight as investor confidence was hit by a resurgence of coronavirus cases and more evidence of the economic impact of the pandemic.
“I have the strong feeling that this V-shaped recovery is being questioned, or at least taking a pause,” said analyst Carsten Menke at Julius Baer in Zurich.
The US state of Florida reported a record increase in new COVID-19 deaths for a third consecutive day on Thursday while Australia and India reported record daily coronavirus infections.
Data showed Europe’s biggest economy Germany had shrunk by a record 10.1 per cent the second quarter and the US economy contracted at a 32.9 per cent annualised rate, its steepest pace since the Great Depression.
Benchmark copper on the London Metal Exchange was down 0.5 per cent at $US6,445 a tonne at 1600 GMT.
It had surged more than 50 per cent during a rebound from lows in March to a two-year peak of $US6,633 a tonne on July 13, partly due to worries about supply from top producer Chile.
“The copper supply disruptions in Chile do not seem to be materialising. Even though they are being affected by the virus, they seem to be keeping production up, so some of this bullishness is fading,” Menke said.
Prices are likely to move sideways to slightly lower in the short term, with $US6,250 fair value, he added.
The Yangshan copper premium in China has declined to $US86.50 a tonne, the lowest since June 16 and down from $US99 two weeks ago.
The most-traded September aluminium contract on the Shanghai Futures Exchange hit a more than two-year high, ending up 1.8 per cent at 14,720 yuan a tonne, on a better-than-expected recovery in top consumer China.
LME aluminium shed 0.2 per cent to $US1,722 a tonne after touching $US1,731.50, the highest since March 5, while lead gave up 0.5 per cent to $US1,864.
Zinc dropped 0.1 per cent to $US2,295.50, having hit a six-month high of $US2,312, nickel fell 0.9 per cent to $US13,745, and tin lost 0.5 per cent to $US17,845.