FOCUS: Steep declines for LME base metals prices amid coronavirus pandemic; copper down 22% since Jan [CORRECTED]

A round-up of the London Metal Exchange three-month base metals price movements following the outbreak and subsequent spread of the novel coronavirus (2019-nCoV).



  • The LME three-month aluminium price hit a low of $1,613 per tonne during morning trading on Wednesday, which is the lowest since early October 2016. The benchmark price has not traded above $2,000 per tonne since October 2018.
  • On-warrant aluminium stocks at LME-listed warehouses remain below 1 million tonnes, recently falling to a four-month low of 795,600 tonnes.
  • Low aluminium prices could be causing problems for smelters with margins tightening. Fastmarkets’ alumina index, fob Australia was calculated at $297.23 per tonne on Wednesday – around 18% of the LME three-month aluminium price.
  • Multiple automakers in Europe have closed down, hampering primary and secondary aluminum demand. This includes German automaker Volkswagen that will suspend output at its European production hub in Bratislava, Slovakia on March 23.


  • The LME three-month nickel price was trading close to its lowest since January 1, 2019 when it hit an intraday low of $10,680 per tonne on Wednesday.
  • Nickel production remains largely unaffected by the coronavirus, with the market having already geared itself toward bearish appetite moving out of 2019 and into 2020.
  • Chinese data service Antaike previously indicated that the virus would incite a sharp short-term decline in downstream stainless steel demand for nickel in the first quarter of 2020 – mills could operate on stockpiled material brought before the Lunar New Year and would be unlikely to resupply due to virus-related logistical issues in moving end products.
  • The anticipated electric vehicle (EV) boom in battery demand for nickel has also been subject to slowed growth this year – the latest figures from the China Association of Automobile Manufacturers (CAAM) show sales of new energy vehicles (NEVs) – including EVs – dropped by 75.2% year on year in February. Output of such vehicles in China fell by 82.9% over the same comparison.
  • Nickel stocks at LME-listed warehouses have almost doubled so far this year, rising to 231,480 tonnes on March 18 from 156,378 tonnes on January 2.


  • The three-month zinc price on the LME is at its lowest since April 2016.
  • Production of zinc has been relatively less disrupted by virus-led isolation and transport lockdown policies than other base metals, with major operations like Antamina carrying on production as usual.
  • Despite the month-long transport restrictions in China earlier this year, Chinese domestic zinc output still rose by 13% year on year to 1.04 million tonnes over the first two months of 2020.
  • Demand has nonetheless remained weak since last year when refined zinc consumption in Europe dropped to five-year low at 2.348 million tonnes in 2019, according to the International Lead Zinc Study Group (ILZSG).


  • Lead was the lone three-month LME base metal to not fall as at 3.09pm London time on Wednesday, with the heavy metal at $1,635 per tonne, up by $9 per tonne from the previous day’s close.
  • Fastmarkets analyst James Moore said that the long tail visible on LME lead’s daily candlestick on Wednesday suggests that strong dip-buying interest has featured below $1,600 per tonne.
  • LME lead stocks totaled 71,125 tonnes on Tuesday, as two-way stock flows continue, despite the fact the LME lead’s cash/three-month spread has returned to a comfortable contango – at $16 per tonne on Wednesday.


  • The LME three-month tin price hit an almost 11-year low of $13,200 per tonne during intraday trading on Wednesday.
  • Tin’s dramatic short-term price decrease has been widely attributed to a persistent bearish speculative fund positioning for the metal, which looks to have been left out of the short-covering rallies and dip-buying seen in the other LME base metals.
  • Bearishness toward tin has been exacerbated by news that South Korea and Japan, dominant regions in the semi-conductor sector, are largely out of the market due to the rapid spread of the coronavirus in both countries.
  • LME tin socks have declined by 14% from the 7,595-tonne year to date high on February 26 to total 6,530 tonnes on Wednesday.

[Editor’s note: This article was updated at 10am London time on March 19 to amend the figure given for the year-on-year decline in China’s new energy vehicle sales in February.]

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