(Updates prices)
LONDON, Oct 28 (Reuters) - Prices of copper and other
industrial metals fell on Wednesday as surging coronavirus
infections raised fears that new lockdowns will stifle economic
recovery.
Stock markets and oil prices plunged and the dollar
strengthened as Germany and France prepared new restrictions,
Russia said the situation was worsening and hospitalizations and
cases rose sharply in the United States. MKTS/GLOB O/R
FRX/ Benchmark copper CMCU3 on the London Metal Exchange (LME)
was 0.9% lower at $6,740 at 1706 GMT, down around 4% from a
28-month high of $7,034 reached last week.
"We're talking about potential new lockdowns in Europe, with
cases just galloping. It's really hitting markets in the
stomach," said Saxo Bank analyst Ole Hansen.
Copper's falls could accelerate if some of the many
speculators who have bet on higher prices are forced to exit
their positions, he said.
DOLLAR: A stronger dollar makes metals costlier for buyers
outside the United States, which can reduce demand.
SPECULATORS: Speculators have built the biggest net long
position in copper on the Comex exchange since the start of
2018. 3085692MNET
CHINA: The Chinese economy is expected to grow 2.1% this
year, its weakest pace in more than four decades, but output
could rebound sharply in 2021, a Reuters poll showed. China is
the world's biggest metals consumer. UNITED STATES: The outlook for the U.S. economy has dimmed,
analysts say. GERMANY: The German economy is likely to have grown by about
6% in the third quarter but the recovery will probably slow, the
DIW institute said. NICKEL: LME nickel CMNI3 was down 1.2% at $15,715 a tonne,
having earlier touched $16,310, the highest since November,
after a coronavirus outbreak at the Philippines' top nickel ore
producer Nickel Asia Corp threatened supply. OTHER METALS: LME aluminium CMAL3 was down 0.9% at $1,805
a tonne, zinc CMZN3 fell 0.5% to $2,533 and tin CMSN3 was
0.3% lower at $18,010.
Lead CMPB3 bucked the trend, rising 1.3% to $1,800.