Copper prices made a strong recovery Tuesday from over three-year declines in the previous trading as cases of the coronavirus fell in China and countries around the world stepped up measures to stimulate their economies.
Other industrial metals also climbed, along with oil and bond markets, with Japan and the US among nations announcing strategies to ward off the negative effects of the virus and support economic growth while Chinese leader Xi Jinping's visit to Wuhan also lifted sentiment.
Benchmark nickel on the European Metal Exchange increased as much as 2.8 percent to $12,985 per ton, while the heavily-traded nickel contract on the Shanghai Futures Exchange advanced as much as 4.4 percent to $15,002.67 per ton.
"We are quite confident that we have seen the bottom for prices, but it all depends on whether we see a deterioration in the (coronavirus) figures for the Western world," BMO Capital analyst Timothy Wood-Dow said.
Wood-Dow added that China is poised to launching a big volume of stimulus "that will come in the form of property investment, which is base-metals heavy and will really pound the Chinese economy later this year."
However, a base metal investor has a different view: "The worst could be over in China," as the country's manufacturing sector slowly comes back online which also raised optimism of an uptick in demand.
According to CRU Group market strategist He Tianyu, the semi-fabricator segment in China is "slowly improving as the virus outbreak is controlled." Copper semi-fabrication processes the metal into products like wire rod or tubes for use in downstream infrastructure.
Wood-Dow noted the stimulus in top metal consumer China was seen to total about 6 to 8 trillion yuan, equivalent to approximately 8 percent of its gross national product.
Business and travel are slowly recovering as well, but rapidly soaring infections worldwide will pose a huge challenge to the nation's broader economic momentum.
Copper production at Codelco, the world's premier copper mining company, fell 6.9 percent in January from a year ago, while output at BHP's Escondida, the world's biggest copper facility, rallied 10 percent.
Aluminum and zinc also neared multi-year lows of $1,913 and $1,644 respectively late Monday, but these too have rallied with decent figures. Nickel and lead seemed positively sanguine about the wider market tumult.
Longer-term investment cash provided copper and other base metals a broad berth over most of its peers in 2019, fund managers worrying that the China-US trade animosity was compounding a circuital Chinese factory slowdown.
