LONDON — Copper prices slipped on Tuesday as the market focused on slowing growth and demand around the world, though some price support was provided by low stock levels in warehouses registered with the London Metal Exchange (LME).
Benchmark copper on the LME was down 1.5% at $7,445 a tonne in official open-outcry trading. Prices of the metal used by investors as a gauge of economic health have dropped 30% since hitting a record peak of $10,845 in March.
Citi analysts expect copper to fall to $6,200 a tonne in the next three months, they said in a note, citing a Europe-led recession and the broader demand outlook in the United States and China.
“Multi-year high (copper) mine supply growth in 2023 should also eventually become a headwind,” they added.
Stocks of copper in LME-registered warehouses
Worries about tight supplies on the LME market have created a hefty premium for cash copper over the three-month contract
Also in focus are copper stocks in China’s bonded warehouses
“The market is tight, evidenced by the low bonded warehouse stocks in China,” said Sucden Financial analyst Geordie Wilkes.
On aluminum, Wilkes said: “Downside pressure persists as China’s aluminum output rises.”
China’s primary aluminum production rose to 3.42 million tonnes in September, up 9.3% from a year earlier, with smelters in a few main regions ramping up output after authorities in the world’s top metal producer relaxed power restrictions.
Additional LME aluminum was up 0.7% at $2,190 a tonne, zinc fell 2.6% to $2,880, lead eased by 0.7% to $1,875, tin slipped 2.2% to $18,050 and nickel was down 1% at $22,025. (Reporting by Pratima Desai reporting by Peter Hobson Editing by David Goodman)