(Updates with closing prices)
LONDON, Jan 29 (Reuters) - Copper prices fell on Wednesday, taking losses over the last seven trading days to 10% as an outbreak of coronavirus in China curtailed economic activity and threatened to reduce metals demand.
Other industrial metals also fell as the death toll from the virus rose to 133, airlines stopped flights to China and the infection spread to other countries.
Oil prices and global stock markets, however, largely stabilised.
Underlining the ongoing risk to metals consumption, a Reuters poll showed growth in China’s sprawling manufacturing sector likely stalled in January.
Toyota said it would keep its production plants in China closed through Feb. 9, and a Chinese government economist said the country’s economic growth may drop to 5% or even lower in the first quarter.
China is by far the largest consumer of metals.
Benchmark copper on the London Metal Exchange (LME) ended 1.1% lower at $5,642 a tonne, down from around $6,250 at the start of last week.
“It’s still too early to call the bottom,” said Capital Economics analyst Kieran Clancy. “You really need to see signs that the virus is being brought under control for prices to recover... there’s a clear downside risk.”
Prices of the metal used in power and construction had been rising as prospects for economic growth improved, but are now nearing a 28-month low of $5,518 a tonne reached last August.
YIELD CURVE: Fears of economic damage from coronavirus are also reflected in the U.S. Treasury yield curve, where three-month yields briefly rose on Tuesday above 10-year borrowing costs.
The so-called curve inversion is seen as a fairly reliable signal of oncoming recession.
DOLLAR: The dollar strengthened for a fifth day as investors looked for safe places to park money, putting pressure on metals priced in the greenback by making them more expensive for buyers with other currencies.
FED: The U.S. Federal Reserve will conclude its latest policy meeting on Wednesday with interest rates almost certain to remain on hold.
LEAD SPREAD: The premium of cash lead over the three-month contract on the LME fell to $0.75 from a 5-1/2 month high of $26.50 on Monday, suggesting that tightness in nearby supply was easing. MPB0-3
OTHER METALS: Benchmark LME lead finished down 3.1% at $1,832 a tonne, aluminium slipped 0.9% to $1,735.50, zinc fell 0.9% to $2,211, nickel lost 0.1% to $12,550 and tin closed down 0.8% at $16,200.
Reporting by Peter Hobson; Additional reporting by Mai Nguyen in HANOI; Editing by Jan Harvey and Elaine Hardcastle
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