SINGAPORE — Prices of industrial metals rose on Tuesday as a drop in new coronavirus cases in China boosted hopes for an improvement in domestic demand, while President Xi Jinping’s visit to the outbreak epicenter in the central city of Wuhan aided sentiment.

Xi’s first visit to Wuhan since the epidemic follows a sharp drop in new cases in mainland China in the past week, with 19 new infections by Monday, down from 40 a day earlier.

Benchmark three-month nickel on the London Metal Exchange (LME) climbed as much as 2.7% to $12,985 a tonne, while the most-traded nickel contract on the Shanghai Futures Exchange (ShFE) rose as much as 4.3% to 104,000 yuan ($14,990.34) a tonne.

“The worst is over in China,” a base metals trader said.

Factories slowly coming back online also raised hopes of an uptick in demand.

“In China, the semi-fabricator industry is improving slowly,” CRU Group analyst He Tianyu said, adding that demand from construction and infrastructure sectors is also improving, albeit at a slower pace

Utilization rate at copper semi fabricators, which process the metal into products such as wire-rod or tubes, has picked up to 60% from 40%-50% a week earlier, as more people return to work, the analyst said.

LME copper rose 1.2% to $5,603 a tonne by 0710 GMT and zinc advanced 1.3% to $2,006 a tonne. ShFE copper increased 1.8% to 44,350 yuan a tonne and ShFE zinc jumped as much as 3.9% to 16,010 yuan a tonne before easing to close at 15,910 yuan a tonne, up 3.3%.

FUNDAMENTALS

* CHINA: Business and travel activities are steadily recovering, but rapidly rising infections globally will pose a challenge to the country’s broader economic resumption.

* CHILE COPPER: Copper output at Codelco, the world’s top copper miner, plunged 6.8% in January from a year earlier. Production at BHP’s BHP.AX Escondida, the world’s largest copper mine, rose 10%.

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PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminum

Most active ShFE aluminum

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.9378 Chinese yuan renminbi)