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METALS-Copper sinks below $5,000 a tonne as virus panic sees metals give up gains

Tom Daly

gains@ (Adds detail on mine curbs, analyst comment; updates prices) BEIJING, March 18 (Reuters) - London copper prices dived below $5,000 a tonne for the first time since November 2016 on Wednesday, as a base metals rally driven by mine closures in Peru gave way to renewed fears about the hit to demand from the coronavirus. Three-month copper on the London Metal Exchange was earlier on course to snap two days of steep losses as it rose up to 0.9% before plunging suddenly and sharply around 0545 GMT. It fell as much as 3.7% to $4,952 a tonne, the lowest since Nov. 4, 2016. Nickel, zinc, lead and tin all added more than 2% in early trade but zinc also turned negative, hitting $1,847 a tonne, its lowest since May 2016. Aluminium sank to $1,631.50, its lowest since October 2016. Prices had earlier been supported by miners' move to shutter and wind down operations in Peru after the South American country declared a state of emergency and likely supply chain disruptions in neighbouring Chile, the world's top copper producer. "Peru and Chile account for 60% of China's total copper concentrate imports," said Helen Lau, an analyst at Argonaut Securities. Some of the South American mines also produce zinc. Chinese copper smelters are yet to resume full production after virus-related disruptions in January and February, "but from now on you can start to worry about ports, shortage of labour, quarantine and lockdowns that could happen in South America as well, Lau added.

FUNDAMENTALS

* FREEPORT: Freeport-McMoRan Inc said its Cerro Verde copper mine in Peru has temporarily transitioned to care and maintenance for 15 days.

* CANADA: Vale SA is reducing activity and output at its Voisey's Bay copper mine in Canada as a precaution to protect nearby indigenous communities.

* ZINC: Teck Resources said its 22.5%-owned Antamina zinc mine in Peru will continue to operate with a reduced workforce during the 15-day emergency period and any temporary reduction in production would be recovered in line with existing 2020 guidance.

* LME RING: The LME plans to suspend open-outcry trading next week and shift all business to its electronic system for the first time.

* STIMULUS: The Trump administration said on Tuesday it was pursuing a $1 trillion stimulus package to buttress the economy.

* TIN: Indonesia's PT Timah <TINS.JK<, the world's second-largest tin producer, said it was temporarily reducing production and would delay exports as the virus hits demand.

PRICES 0602 GMT

Three month LME copper 4980.5Three month LME 1632.5

aluminium

Three month LME zinc 1855Three month LME lead 1620Three month LME 11885

nickel

Three month LME tin 14250

($1 = 7.0110 Chinese yuan renminbi)

(Reporting by Tom Daly; Editing by Anil D'Silva, Aditya Soni)

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