Rising recession fears push copper to 16-month low
LONDON - Copper prices fell to a 16-month low on Thursday as fast-rising interest rates and weak economic data fanned fears of a global slowdown that would reduce demand for metals.
Benchmark copper on the London Metal Exchange (LME) was down 2% at $8 595 a tonne in official trading after touching its lowest since February 2021 at $8 552.
Prices are down more than 20% from a record high of $10 845 in March.
"Recession fears have become heightened," said WisdomTree analyst Nitesh Shah. "We are seeing a broad-based cyclical sell-off. It's not just copper, not just industrial metals, it's equities markets, too."
Shah said that aggressive increases to interest rates could push copper even lower, but he expects prices to be significantly higher in five years because of rising demand for the metal as the world transitions from fossil fuels to electrification.
Copper is used in wiring to transmit electricity.
INTEREST RATES: Central banks are raising interest rates sharply to rein in soaring inflation, which in turn will restrain economic growth.
US Federal Reserve chair Jerome Powell on Wednesday said he is committed to bringing inflation under control even at the risk of an economic downturn.
GLOBAL ECONOMY: Manufacturing growth is slowing from Asia to Europe while the growing risk of a recession in the United States poses a new threat to the global economy. Read full story
MARKETS: Global equities and oil prices fell.
CHINA: Mainland China reported 135 new coronavirus cases for June 22, up from 126 new cases a day earlier. Covid restrictions in China have reduced metals demand.
ZINC: Available zinc inventories in LME-registered warehouses have shrunk by two thirds this week to the lowest in at least 24 years.
In a sign of tight supply, the premium for quickly delivered cash zinc over the three-month contract shot to a three-year high of $161 a tonne.
Benchmark LME zinc
OTHER METALS: LME aluminium
Tin
Comments
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation