* GRAPHIC-2020 asset returns: tmsnrt.rs/2jvdmXl
* Net spec shorts rise across base metals -Marex Spectron
* Copper inventories dip in China and on LME (Updates throughout, changes dateline to LONDON)
By Zandi Shabalala
LONDON, April 6 (Reuters) – Copper firmed on Monday, supported by a slowdown in coronavirus deaths in some European countries and falling inventories, though fears of recession continued to weigh on prices.
Benchmark copper on the London Metal Exchange (LME) gained 0.8% to $4,879 a tonne by 1034 GMT. Its gain of 1% last week snapped a six-week losing streak on positive factory data from top consumer China.
Deaths and new infections from the coronavirus eased in countries including France, Italy and Spain.
Meanwhile, Japan is expected to become the latest country to unveil a stimulus package to cushion its economy against a knock from the epidemic.
“As major economies reach and get over the peak of the (coronavirus) curve, we anticipate risk appetite to improve. However, in the long run, as the global economic conditions remain weak, we expect prices to give back those gains,” said Sucden Financial’s head of research Geordie Wilkes.
INVENTORIES: Stocks of copper in LME-approved warehouses shed 1,050 tonnes to 217,475 tonnes. Stocks have been in steady decline since hitting a 2020 high of 220,325 tonnes on March 17. MCUSTX-TOTAL
Copper inventories in warehouses tracked by the Shanghai Futures Exchange CU-STX-SGH fell for a third straight week on Friday to 332,435 tonnes, down 13% from their near-four-year high hit in mid-March, exchange data showed.
ANTOFAGASTA: Copper producer Antofagasta said it would suspend operations at its Los Pelambres Expansion project in Chile for four months because of the coronavirus.
Other companies in Chile, the world’s largest source of mined copper, were also considering output cuts as the country took strict measures to contain the pandemic.
ALUMINIUM SUPPLY: Aluminum Corp of China, , known as Chalco, will consider carrying out maintenance or even shuttering some aluminium production as well as cutting alumina output due to low prices.
LME aluminium fell for a sixth straight session to a four-year low, down 0.8% at $1,469.50 a tonne. The price is down 19% this year.
POSITIONING: Marex Spectron’s Alastair Munro noted that positioning across metals remains short mainly in zinc and aluminium, which are either at or close to records on both the LME and SHFE exchanges.
“Whilst these short positions are not in themselves reasons to own metals, they do raise the possibility of a very short-term squeeze higher, especially given light risk appetite amidst ongoing uncertainty,” he said.
CHINA HOLIDAY: The Shanghai Futures Exchange was closed for a public holiday.
PRICES: LME zinc shed 0.5% to $1,871 a tonne, lead slipped 1% to $1,641, tin was up 1.3% at $14,305 and nickel was steady at $11,230.
Reporting by Zandi Shabalala
Additional reporting by Mai Nguyen
Editing by David Goodman
