Major metals and mining firms have witnessed share price drops as uncertainty mounts around the deadly coronavirus.
Edelweiss metals analyst Amit Desai said: “It is too early to comment. The reactions we are seeing have more to do with sentiments than fundamentals.”
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China is said to be the world’s largest consumer and producer of commodities, and concerns on the spread of the country’s novel virus has led to a decrease in demand for base metals.
The country contributes nearly half of the total global demand and supply.
Following the outbreak, the coronavirus death toll in China reached to 132 and 5,974 cases are confirmed. The number of countries affected with the virus is believed to be more than 15, including the US, France, Singapore, Malaysia and Australia.
Bloomberg reported that mining shares were worst hit by fears that China could not contain the coronavirus outbreak and further added that iron ore futures extended losses to 6% on virus spread concerns.
In the past three trading sessions on the London Metal Exchange, aluminium, copper and zinc prices decreased by 2.3% and 3.7%.
Copper prices declined as the rising coronavirus death toll increased worries over its potential impact on the Chinese economy.