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Copper prices post two-day losing streak on Omicron concern

By Fitri Wulandari

08:55, 20 December 2021

Copper-plates making process in a smelter
The SMM said the worsening pandemic intensified market concerns and dragged down copper prices – Photo: Shutterstock

Copper prices extended losses on Monday, dropping 1% to below $9,400 on mounting concern about the spread of the coronavirus Omicron variant would slow economic growth, leading to softer metals demand.

The benchmark copper futures on the London Metal Exchange (LME) fell 1.03% to $9,354.5 per tonne. US copper futures dipped 1.23% to $4.24 per pound.

“The worsening pandemic of Covid-19 variant Omicron intensified the market concerns and dragged down copper prices,” Shanghai Metal Market said in its morning commentary on Monday.

Omicron spread

The World Health Organization (WHO) on Friday in its update said Omicron has been identified in 89 countries across all six WHO regions. 

The United Nations body also said evidence showed that the variant is spreading significantly faster than the Delta variant in countries with documented community transmission, with a doubling time between 1.5-3 days.

Oil - Crude

74.50 Price
-1.560% 1D Chg, %
Long position overnight fee -0.0136%
Short position overnight fee -0.0083%
Overnight fee time 22:00 (UTC)
Spread 0.040

Oil - Brent

79.15 Price
-1.620% 1D Chg, %
Long position overnight fee 0.0010%
Short position overnight fee -0.0229%
Overnight fee time 22:00 (UTC)
Spread 0.045


2,072.25 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.30

Natural Gas

2.77 Price
-1.140% 1D Chg, %
Long position overnight fee 0.0451%
Short position overnight fee -0.0670%
Overnight fee time 22:00 (UTC)
Spread 0.0050

“Omicron is spreading rapidly in countries with high levels of population immunity and it remains uncertain to what extent the observed rapid growth rate can be attributed to immune evasion, intrinsic increased transmissibility or a combination of both,” WHO said, adding that it is likely Omicron will outpace Delta where community transmission occurs.

Prices to fall before Christmas

“The copper prices may rise initially before falling amid the risk aversion of some investors ahead of the Christmas holiday,” SMM said in a separate note, adding that the market is still looking at a series of US economic data, including employment rate and inflation for price guidance.

On the physical market side, operation suspension at MMG’s Las Bambas copper mine on 18 December due to road blockage by local community may supress spot market for copper concentrate, SMM said.

However, the long-term impact on overall supply and demand pattern will be limited.

Read more: Aluminium price retreat from six weeks high

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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