LONDON, Dec 21 (Reuters) - Copper and other industrial metals prices sagged on Monday as a more infectious strain of the coronavirus threatened to wreak further damage on the global economy and investors ditched riskier assets.
Equities and oil prices fell and the dollar strengthened as many countries closed their borders to Britain after Prime Minister Boris Johnson said that a variant of the virus up to 70% more infectious had been identified in the country.
Benchmark copper on the London Metal Exchange (LME) was 1.7% lower at $7,853 a tonne at 1700 GMT.
European shares fell by about 2%, U.S. equities were down around 1% and oil tumbled by about 4%, while the stronger dollar made dollar-priced metals costlier for buyers outside the United States.
“It’s a classic risk-off move triggered by this mutation of the virus,” said Julius Baer analyst Carsten Menke.
Copper had rallied to $8,028 a tonne last week, its highest since 2013, as strong Chinese demand, government stimulus and the rollout of coronavirus vaccines encouraged speculators to pile into the market.
“The last leg of the rally was driven by the crazily bullish market move,” said Menke. “Excessive speculation meant there was around 10% downside. What was needed was a trigger.”
STIMULUS: U.S. congressional leaders agreed on a $900 billion coronavirus aid package. Votes on the deal are likely on Monday.
POSITIONING: Copper could slip if speculators holding their largest net long positions on the LME and Comex exchange since 2017 become less bullish and cut their positions.
COPPER: The 24-million tonne a year refined copper market showed a 155,000-tonne deficit in September after a 72,000-tonne deficit in August, the International Copper Study Group (ICSG) said.
ALUMINIUM: Global primary aluminium output rose in November to 5.471 million tonnes, up 4.1% year on year, data from the International Aluminium Institute (IAI) showed.
TRADING: The London Metal Exchange (LME) said it planned to launch six cash-settled futures contracts on June 14, 2021.
OTHER METALS: LME aluminium was down 1.7% at $2,022.50 a tonne, zinc lost 1.4% to $2,833, nickel slipped 1.2% to $17,275, lead plunged 4.1% to $1,955 and tin was down 0.6% at $19,935.
