Copper prices slumped to their lowest
levels since November 2020 on Wednesday, weighed down by a
strong U.S. dollar and threats to demand from heightened fears
of a global recession and renewed lockdowns in top consumer
Three-month copper on the London Metal Exchange
dropped as much as 4.9% to $7,291.50 a tonne and was down 1.5%
at $7,557.50 as of 0702 GMT.
The most-traded August copper contract in Shanghai
ended daytime trading down 5.4% to 57,620 yuan ($8,595.38) a
The dollar stood tall near a 20-year peak against the euro,
making metals priced in the U.S. currency more expensive for
other currency holders.
“The base metals complex remains pressured by macro
headwinds stemming from China’s COVID lockdowns and the impact
of monetary policy tightening and slowing global growth on
demand,” Standard Chartered said in a note.
Adding to growth worries, business growth across the euro
zone slowed further last month, according to a survey in which
forward-looking indicators suggested the region could slip into
decline this quarter.
In 2022, supply side may exceed demand in base metal
complex. Investors are refraining to take large positions in
this market as recession fears mount, said Vandana Bharti,
assistant vice-president of commodity research at SMC Comtrade.
COVID: China is fighting COVID-19 flare-ups on multiple
fronts across the country including an emerging cluster in
Shanghai, spurring mass testing drives and fresh restrictions.
INTEREST RATES: Central banks around the world are raising
interest rates sharply to rein in soaring inflation, restraining
MARKETS: Asian stocks slipped as investors’ fears deepened
that the continent is leading the world into recession.
DATA: German industrial orders grew slightly in May after
three consecutive months of decline due to the war in Ukraine,
data showed on Wednesday.
OTHER METALS: LME aluminum was down 0.1% at
$2,389.50 a tonne, zinc gained 1% to $3,019, lead
rose 0.5% to $1,948, nickel fell 1.2% to
$22,370, and tin dipped 3% to $25,230.
Shanghai aluminum lost 2.5%, zinc fell
1.1%, nickel slipped 1.2%, lead eased 0.4%,
and tin shed 5.3%.
($1 = 6.7053 Chinese yuan)
(Reporting by Brijesh Patel in Bengaluru
Editing by Tomasz Janowski)