The media uproar over the Delta Variant, a version of COVID-19 that is thought to spread more quickly than other variants, is having an effect on commodities prices, reports the FT, writing:
From crude to copper and corn, commodity prices slipped on Monday, knocked by the spread of highly infectious coronavirus variants and concerns about slowing growth in China, the world’s biggest consumer of raw materials.
Brent, the international oil marker, fell as much as 1.7 per cent to $74.27 a barrel, while copper dropped 1.1 per cent to $9,390 a tonne — leaving it more than $1,000 below the record high reached in May.
Gold was also weaker as the dollar rose, something that makes the previous metal more expensive for holders of other currencies. It fell 0.6 per cent to $1,800 a troy ounce. Corn was trading at $6.23 a bushel, down 20 per cent from this year’s peak in May, as some market bulls retreated owing to the recent rains in the US midwest.
The rapid spread of the Delta coronavirus variant and signs of slowing growth in China are clouding the outlook for commodity markets, which have enjoyed a blockbuster run over the past year. There is also increased uncertainty about oil supply after Opec and its allies failed to reach an agreement on raising production earlier this month.
“Infections are on the rise in several countries around the world and if restrictions need to be added or reinstated again, they could have an impact on economic growth, and consequently on oil consumption,” said Louise Dickson, oil markets analyst at Rystad Energy.
Over the weekend, finance ministers from the G20 warned that the rapid spread of the Delta variant was casting a shadow over the improving economic outlook in Europe.
Meanwhile, analysts at JPMorgan said on Monday that modelling of the UK Delta outbreak suggested a hospitalisation level that could require reintroduction of some restrictions.
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