Copper at lowest in nearly a week on rising virus cases, stronger dollar

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London copper prices hit a near one-week low on Monday after a surge in coronavirus cases raised doubts about a global economic recovery and as the dollar strengthened, making greenback-priced metals more expensive for buyers holding other currencies.

The United States recorded its highest ever number of new COVID-19 cases for two consecutive days, while Spain announced a new state of emergency and Italy ordered restaurants and bars to shut by 6 p.m. as Europe battles a fresh wave of infections.

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“Surging COVID-19 cases and increased restriction measures around the world mean that markets are likely to face some headwinds,” ING analysts said in a note.

The dollar was stronger as rising virus cases and lack of progress towards a U.S. stimulus package put traders in a cautious mood.

Three-month copper on the London Metal Exchange fell 0.3% to $6,847 a tonne by 0704 GMT, after hitting $6,842.50 a tonne, its lowest since Oct. 20, earlier in the session.

The most-traded December copper contract on the Shanghai Futures Exchange closed down 0.6% at 51,810 yuan ($7,749.38) a tonne.

FUNDAMENTALS

* LME nickel dropped 1.4% to $15,500 a tonne and zinc declined 1% to $2,534 a tonne. In Shanghai, nickel fell 1.6% to 117,880 yuan a tonne and lead decreased 2.3% to 14,160 yuan a tonne.

* The global world refined copper market showed a 255,000 tonnes deficit in July, compared with a 351,000-tonne deficit in June, the International Copper Study Group said in its latest monthly bulletin.

* China reverted to being a net aluminum exporter in September, official data showed, as the price gap between foreign and domestic metal narrowed, making shipments from overseas more expensive.

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