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Copper treads water as stimulus promises fail to calm virus fears

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By Zandi Shabalala

LONDON, March 11 (Reuters) - Copper was steady on Wednesday as a decline in new coronavirus cases in China and central bank stimulus was offset by concerns the virus had not been completely stamped out and continued to threaten demand for metals.

Benchmark copper on the London Metal Exchange (LME) was down 0.1% to $5,560 a tonne in official rings after touching a three-year low of $5,433 on Monday.

The virus, which has infected 80,778 people in China and killed 3,158, has hobbled manufacturing in the country and its spread has sparked fears of a global slowdown.

The Bank of England on Wednesday was the latest central bank to cut interest rates in an effort to stop the outbreak triggering a recession.

Capital Economics analyst Kieran Clancy said while the response from central banks was encouraging, the impact would be minimal without a significant slowdown in infections and rollbacks in government containment measures.

"On one hand it's clear that central banks are throwing kitchen sink at this virus but all this support is a bit of a blunt instrument if virus is still going," he said.

"There are competing forces and that is reflected in some prices being flat."

CHINA: Signalling a turnaround in the fight against the spread of the virus, Chinese President Xi Jinping visited Wuhan, the epicenter of the epidemic, for the first time since the outbreak began.

About three-quarters of China's municipalities, regions and provinces lowered their emergency response level from the highest tier.

U.S STIMULUS: The White House and Congress negotiated measures on Tuesday to bolster the U.S. economy and Americans' paychecks against the outbreak's impact, although there was no immediate sign of a deal.

JAPAN MEASURES: Japan announced a second package of measures worth about $4 billion.

METALS TRADING: The LME has made contingency plans to relocate or ditch open-outcry trading if the coronavirus outbreak worsens.

ZINC INVENTORIES: Zinc stocks in LME-approved warehouses <MZNSTX-TOTAL> gained 675 tonnes to 75,225 tonnes, close to seven-month highs set on Feb. 25.

They touched their lowest in at least 30 years at about 50,000 tonnes earlier this year.

LITHIUM: Albemarle Corp, the world's largest producer of lithium for electric vehicle batteries, said it is experiencing a weak first quarter in China.

CHINA AUTOS: Vehicle sales in China, the world's top car market, tumbled in February as customers stayed at home and away from dealerships due to the epidemic.

PRICES: LME aluminum was bid down 0.5% to $1,686 a tonne after failing to trade in official rings. Zinc was bid up 0.9% to $1,993, lead traded at a steady $1,796, tin was bid down 0.9% to $16,725 while nickel was bid 1.6% lower at $12,480.

(Reporting by Zandi Shabalala, Additional reporting by Mai Nguyen; Editing by Kirsten Donovan)

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