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New COVID Option Rocks Metals Markets

Mining industry / Africa

Copper is still very scarce due to low stocks on the London Metal Exchange

New COVID Option Rocks Metals Markets

Copper and other industrial metals prices fell on Friday as a new and possibly vaccine-resistant variant of the coronavirus found in South Africa shook market sentiment.

It is important to emphasize that very little is known about this latest strain at this point, so it is difficult to make any sound investment decisions at this stage, "Paul Hickey of Bespoke Investment Group said in his address to clients. >

In a matter of hours, Great Britain, Israel and Singapore have restricted entry from South Africa and some neighboring countries. Officials in Australia and New Zealand said they are watching the new option closely.

London Metal Exchange (LME) benchmark copper fell 2.9% to $ 9,474 a tonne in official trading. Copper for March delivery fell 3.9% on the Comex market in New York to $ 4.28 a pound ($ 9,416 a tonne).

Aluminum on the LME fell 4.2% to $ 2,601 per tonne, zinc fell 3.1% to $ 3,197, lead fell 0.4% to $ 2261, tin fell 0.5% to $ 38,600, while nickel fell 3.7% to $ 19,895.

Shares in copper and non-ferrous metals miners reflected a decline. BHP Group shares fell 3.1%, Glencore plc fell 6.5%, Freeport-McMoRan fell 5.4% and Southern Copper fell 3.6%. First Quantum Minerals is down 9.4% on the day.

The decline came after WHO officials on Thursday warned of a new COVID-19 variant found in South Africa. Variant B.1.1.529, its scientific name, reportedly contains more mutations in the spike protein, a component of the virus that binds to cells, than the highly infectious Delta variant. WHO said further research is needed.

Copper is still very scarce due to low stocks on the LME and supply has not fully recovered, so prices could hold up pretty well even if economic growth slows, ”said Amelia Fu, Head of Commodity Markets Strategy, Bank of China International.

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