Three-month copper on the London Metal Exchange dipped 0.6% to $9,741 a tonne
London copper prices dropped on Friday as a newly identified COVID-19 variant in South Africa and expectations of faster-than-expected U.S. rate hikes fuelled concerns of an economic slowdown.
Three-month copper on the London Metal Exchange (LME) dipped 0.6% to $9,741 a tonne by 0250 GMT. The most-traded January copper contract on the Shanghai Futures Exchange (ShFE) shed 1.2% to 71,050 yuan ($11,115.63) a tonne.
South African scientists have detected a new COVID-19 variant in small numbers and are working to understand its potential implications. The new variant announcement prompted Britain to introduce travel restrictions on South Africa and five neighbouring countries.
Minutes of the Federal Reserve’s last policy meeting showed a growing number of policymakers being open to speeding up the central bank’s tapering programme.
An early rate hike could trim liquidity in financial markets and slow recovery in the world’s biggest economy. Copper is often used as a gauge of global economic health.
LME aluminium eased 0.4% to $2,706.5 a tonne, nickel was down 0.3% at $20,615 a tonne, and lead traded 0.4% higher at $2,280.5.
LME tin was unchanged on the day, having scaled a record peak of $40,680 a tonne on Thursday amid tight supply.
ShFE aluminium dropped 0.4% to 19,355 yuan ($3028.29) a tonne, nickel was down 2% at 151,550 yuan ($23711.54) a tonne, lead gained 1% to 15,365 yuan ($2404.01) a tonne, zinc dipped 0.7% to 23,605 yuan ($3693.24) a tonne and tin shed 1.3% to 286,170 yuan ($44774.22) a tonne.
Meanwhile, stocks dropped and headed for their largest weekly drop in nearly two months, while safe haven assets such as bonds and the yen rallied as a new virus variant added to swirling concerns about future growth and higher U.S. interest rates.
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