LONDON: Prices of most industrial metals climbed on Thursday, supported by expectations of further measures from central banks and governments to shore up economic growth and demand weakened by the spread of the coronavirus.

Traders said the mood, however, in industrial metals markets remains sombre as consumers and producers wait to see how demand holds up over the coming weeks and months.

Benchmark zinc on the London Metal Exchange (LME) climbed 1.5% to $2,011 a tonne in final open outcry trading.

Prices of the metal widely used for galvanising steel are down by nearly a fifth since mid-January.

ETAuto.com CV & Logistics Conclave 2020-Emerging Out Of Gloom“The physical market is sidelined, trading is dominated by funds reacting to macro triggers,” one copper trader said, adding that the market was waiting for indications on manufacturing and construction activity in top consumer China.

COPPER: While most base metals rose, copper moved into the red as U.S. and European share markets resumed their downward trend as cases of the virus surged in the United States.

Copper, the metal often used by investment funds as a proxy for the global economy, dipped 0.2% to $5,674 a tonne in closing rings.

STIMULUS: The widening economic fallout of the virus has prompted policymakers around the world to step up monetary support, including an emergency 50 basis point interest rate cut from the U.S. Federal Reserve.

“The current uncertainty remains a headwind for now,” analysts at BofA Global Research said in a note.

“At the same time, we believe that global activity should rebound as coronavirus cases ultimately peak in China and the Western world, logistics normalise and fiscal and monetary stimulus kicks in.”

DOLLAR: Base metals drew some support from a weaker dollar, which makes commodities cheaper for holders of other currencies, boosting demand.

VIRUS: Wuhan, the epicentre of China’s coronavirus epidemic, will likely see new infections drop to zero by the end of this month, even as the city reported a quicker rise in new confirmed cases.

DATA: Clues to the health of the Chinese economy will emerge on Saturday with the release trade data for January and February.

A Reuters survey showed that analysts expect China’s exports and imports to have fallen because the coronavirus has disrupted supply chains.

“Ripple effects on global supply chains are likely to continue to grow at a rate dependent on the scope and rate of any recovery,” Citi analysts said in a note.

“But, undoubtedly, Asian economies dependent on imports from, or exports to, China are on a first line of vulnerability.”