London copper prices fell on Friday, as a newly identified Covid-19 variant in South Africa fuelled concerns over its impact on economic growth and dented risk appetite.
Three-month copper on the London Metal Exchange fell 2.1% to $9 596 a tonne by 08:05 GMT. The most-traded January copper contract on the Shanghai Futures Exchange dropped 1.9% to 70 560 yuan ($11 040.01) a tonne.
The new coronavirus variant, detected by South African scientists, might make vaccines less effective. Britain introduced travel restrictions on South Africa and five neighbouring countries.
This led to Asian stocks suffering their sharpest drop in three months, as investors rushed towards safe-haven assets.
"I think it's still early days to really see if there's any impact on the physical side of the (metals') business," a Singapore-based trader said.
There is enough upside for copper prices with the physical availability of the metal being pretty scarce, the trader said adding, for 2022 the demand picture looks questionable with buyers becoming cautious with the prices rising "too quickly."
On-warrant LME copper inventories though edged up to 62 950 t, is still down nearly 74% from 238 725 t in August. Prices have risen 25% this year.
Copper stocks in ShFE-registered warehouses were at 34 918 t, the lowest since June 2009.
Copper is often used as a gauge of global economic health due to its widespread application in many sectors.
FUNDAMENTALS
- LME aluminium fell 1.9% to $2 665.5 a tonne, nickel was down 3.1% at $20,025 a tonne, zinc fell 2.4% to $3 222 a tonne and lead slipped 0.8% to $2 252 a tonne.
- LME tin was down 1% at $39 300, having scaled a record peak of $40 680 a tonne on Thursday amid tight supply.
- "Tin prices will remain on an uptrend in the coming weeks as policy uncertainty from top exporter Indonesia roils the market," Fitch Solutions said in a note.
- ShFE aluminium fell 2.4% to 18 960 yuan a tonne, nickel was down 3.1% at 149 780 yuan a tonne, lead gained 0.8% to 15 330 yuan a tonne, zinc dipped 1.4% to 23 445 yuan a tonne and tin shed 1.7% to 284 980 yuan a tonne.
- Communities in Peru's Ayacucho region say they will resume protests against the mining sector if the government breaches what they call a signed agreement to shutter mines, local leaders told Reuters.