Wires

METALS-London copper near 3-year low on virus fears, oil plunge

Mai Nguyen

(Updates prices)

March 9 (Reuters) - Base metal prices dropped on Monday, with London copper hitting its lowest in nearly three years, as crashing oil prices and fast-rising coronavirus cases battered global risk sentiment.

Oil plunged more than 30% after Saudi Arabia set off a price war with Russia, further spooking global investors unnerved by the economic carnage from the virus epidemic.

Three-month copper on the London Metal Exchange (LME) fell as much as 2% to $5,494 a tonne, its lowest since May 2017. However, it later recouped some losses to trade at $5,506.50 a tonne by 0701 GMT, down 1.8%.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) dropped to a 40-month low at 43,310 yuan ($6,238.12) a tonne, before rebounding to trade 2.7% lower at 43,570 yuan a tonne.

"All eyes are on China for any hint about further stimulus measures," said Anna Stablum, a commodity broker at Marex Spectron.

"We are already seeing large short positions on most of these metals so if there is a headline of stimulus coming out of China, there is a big chance we will see short-covering taking them higher," Stablum said.

FUNDAMENTALS

* ALUMINIUM: ShFE aluminum fell below the 13,000-yuan price level for the first time since September 2016, and was down 2.2% at 12,795 yuan a tonne.

* "Chinese aluminum smelters are known to have been running at large losses. Production cuts would be welcome as demand from cars and other end-user goods are crumbling," Stablum said.

* ZINC: ShFE zinc tumbled to its lowest since June 2017 to 15,195 yuan a tonne, while LME zinc dropped to a 45-month low at $1,929 a tonne on weak demand and rising inventories.

* VIRUS: The number of coronavirus cases in Italy and the United States rose quickly over the weekend. Globally, more than 3,500 people have died and over 100,000 have been infected by the virus.

* CHINA INVENTORIES: Metals inventories in China piled up this week, underscoring persistent sluggish demand in the world's top metals consumer.

* CHINA OUTPUT: China's industry ministry said metals firms should not seek to ramp up production at all costs and should "avoid vicious competition" with one another.

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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 = 6.9428 Chinese yuan) (Reporting by Mai Nguyen; Editing by Tom Hogue and Devika Syamnath)

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