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METALS-Copper falls as spread of coronavirus stokes demand worries

Zandi Shabalala

(Updates throughout, adds LONDON dateline) LONDON, Feb 7 (Reuters) - Copper prices eased on Friday on concerns that a rising death toll from the coronavirus in China could lead to a bigger hit to economic activity and metals demand.

Three-month copper on the London Metal Exchange

(LME) fell 1.1% to $5,675 an ounce by 1218 GMT. However, prices were still on track for their first weekly gain in three on hopes for a cure for the virus. "Metals prices are looking for some direction at the moment," said Caroline Bain, senior commodities economist at Capital Economics. The death toll from the virus in mainland China rose to 636 on Friday, up by 73 from the previous day, the National Health Commission said. "We have had two days where (the) number of infections has been lower so one hopes that the virus is being brought under control but it's still too soon to be in any way certain." There have been two deaths outside mainland China, in Hong Kong and the Philippines and nearly 320 cases have been reported in 27 other countries and regions outside mainland China.

Metals prices mostly fell even as China's central bank pledged support for the economy to cushion the blow from the virus outbreak.

CHINA GROWTH: S&P Global Ratings cut its Chinese 2020 growth forecast to 5%, down from 5.7% on Friday, saying the impact of the coronavirus outbreak could take a heavy short-term toll.

FORCE MAJEURE: Guangxi Nanguo Copper smelter has declared force majeure on deliveries of copper concentrate as a result of the outbreak, sources told Reuters. INDONESIA NICKEL: The first battery-grade nickel and cobalt project in Indonesia using high-pressure acid leaching technology could start commissioning in the second half of 2020, consultancy firm CRU Group said. MITSUBISHI: Japan's Mitsubishi Materials Corp bought a 30% stake in the Mantoverde copper mine in Chile and associated copper project for $236 million to secure more concentrates for its smelters, the company said.

ALUMINIUM: Norsk Hydro reported lower-than-expected

fourth-quarter earnings on falling metal prices and said it expects global supply of aluminium to outstrip demand in 2020.

CHILE: Chile copper export revenue jumped 8.3% to $2.716 billion in January, the central bank said. ZINC: Inventories of zinc in LME-approved warehouses jumped to 62,675 tonnes, data on Friday showed, the highest since Oct. 9. Rising stocks have pushed down the premium of LME cash zinc over the three-month contract to $2.75 a tonne, near its lowest in three-months. <MZNSTX-TOTAL> <CMZN0-3>

OTHER PRICES: LME aluminium rose 0.5% to $1,729 atonne, zinc dropped 2% to $2,163, lead fell 1%to $1,825.50, tin shed 1.6% to 16,440 and nickel

lost 0.6% to $12,985.

(Reporting by Zandi Shabalala, additional reporting by Mai Nguyen; Editing by Susan Fenton)