Nov 18 (Reuters) - Copper edged lower on Wednesday as concerns grew over rising COVID-19 cases worldwide that have prompted fresh lockdowns in the United States and Europe, dampening hopes of a swift global economic recovery from the pandemic.
Aluminium prices provided a silver lining, with China’s benchmark contract scaling a three-year high supported by expectations of a further supply crunch in the world’s top metals consumer.
Benchmark copper on the London Metal Exchange gained 0.1% to $7,071.50 a tonne by 0414 GMT, recouping early modest losses.
The most-traded copper contract on the Shanghai Futures Exchange trimmed early losses and was down 0.8% at 52,700 yuan ($8,039.91) a tonne by the midday break.
The metal hit a 29-month high on Monday as upbeat October factory output data in China reinforced views of solid demand.
“Investors viewed the move in copper to be overdone as the level of restrictions in Europe and the US increases,” said Daniel Hynes, senior commodity strategist at ANZ.
In the United States, several governors restricted gatherings to confront a coronavirus surge that they warned has become out of control.
* China is launching a yuan-denominated copper futures contract this week that will be open to foreign traders, moving to wrest some pricing power away from the LME benchmark.
* Work stoppage will continue at Chile’s Candelaria copper mine after one of the unions on strike rejected a contract offer from the company.
* The Shanghai exchange will lower margin requirement for its nickel futures contract to 8% from 10% from the settlement on Nov. 20.
* Shanghai aluminium jumped 2% to 15,685 yuan a tonne, its strongest since Nov. 7, 2017. LME aluminium rose 0.2% to $1,981 a tonne, after hitting its highest in nearly two years at $1,982 in the previous session.
* Zinc rose, but nickel fell.