Copper prices fell on Wednesday to their
lowest since November 2020, weighed down by a robust US dollar
and threats to demand from heightened fears of a global
recession and renewed lockdowns in top consumer China.
Three-month copper on the London Metal Exchange was
down 2.5% at $7,483 a tonne, as of 0440 GMT, its lowest since
November 27, 2020.
The most-traded August copper contract in Shanghai
dropped 5.5% to 57,550 yuan ($8,582.76) a tonne by the midday
The dollar stood tall near a 20-year peak against the euro,
making greenback-denominated metals more expensive for other
“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 slowdown 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 the demand side in base
metal complex. Investors are refraining to take a large position
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.
OTHER METALS: LME aluminum fell 1.3% to $2,361.50 a
tonne, zinc lost 1.1% to $2,960, lead fell 0.5%
to $1,928.50, and tin dipped 4.4% to $24,860.
Shanghai aluminum lost 3.6%, zinc fell
2.3%, nickel dropped 4.6%, lead eased 0.4%,
and tin shed 5.6%.
($1 = 6.7053 Chinese yuan)
(Reporting by Brijesh Patel in Bengaluru)