Copper prices went down. Intense fears rose that the spread of the Coronavirus could decrease demand in China. This is because the country is the world’s biggest consumer in commodities. Copper dropped 3.3% and settled at $2.5965 a pound, the metal’s lowest closing price since October 18. Last week, LME copper posted its sharpest weekly loss in five years, falling 5.5%, as the virus spread.
Edward Marshall, a trader at Global Risk Management, claims that the world is in full panic mode, close to peak hysteria. Analysts say that China demands accounts for about 50% of the majority of the base metals.
Coronavirus Keeps Spreading
The virus has infected more than 2567 people and killed at least 80. This mostly took place in Hubei province – of which Wuhan is the capital. Infected people are under isolation treatment at designated medical institutions. Others are under medical observation.
At present, coronavirus infections are still in the epidemic period. People are gradually discovering the sources, diseases, transmission routes, diagnosis, and treatment methods of a new virus. The latest observations on the phenomena show that the new Coronavirus (nCoV) is related to SARS. Still, it lacks clinically systematic and comparable data support and sufficient evidence. China is in a critical position in the prevention and control of coronavirus infections. According to the National Health Commission and the State Administration of Traditional Chinese Medicine, the virus is mainly transmitted through respiratory droplets. It can also be spread through contact. An incubation period is generally 3 to 7 days, with a maximum of 14 days.
According to a research on the physical and chemical properties of viruses, Coronavirus is sensitive to heat 56°C 30 minutes, or 75% ethanol (alcohol), chlorine-containing disinfectant, peracetic acid, and lipid solvents such as chloroform.
Analysts aren’t able to assess the potential impact of the Chinese outbreak of the virus on the global economy, but it’s obvious that China’s economy will undoubtedly be affected.
Copper has Given Up its Gain Since December
Lots of people would tie copper prices falling to the virus outbreak, but the problem is the chart hasn’t been moving up for the last four or five weeks, states StockCharts channel.
It’s been several weeks, the copper market has been experiencing lower bend, and it kept running low. Copper chart made a big move down of 5,5%. But still, one of the worries that have been concerning the global market is the Shanghai metal market chart, which hasn’t been moving up. The Shanghai chart had one real trading day, which was on Monday. Then the market closed for Chinese New Year. The Chinese government has taken radical measures against the virus spread across the country and extended the holiday.
The investment bank anticipates a slightly weaker February-March for copper prices, but it mustn’t make much of an impact on the US market other than for global demand, as StockCharts reports. Traders hope they get good earning points this week from the US, or else panic selling will be even worse.