Copper extends losses on fears of a global recession

Copper prices fell for a third day in a row on Thursday and tin slumped to a one-week low as a gloomy economic outlook for top metals consumer China fanned concerns about a global recession, though a soft US dollar lent some support.

Three-month copper on the London Metal Exchange was down 0.3% at $9 343/t as of 07:24 GMT. The most-traded July contract on the Shanghai Futures Exchange ended daytime trading 0.5% lower at 71 080 yuan ($10 562) a tonne.

Copper is often used as a gauge of global economic health. Prices of most other base metals in Shanghai also fell, while LME tin dropped as much as 3.6% to $32 830/t, the lowest since May 18.

“The lockdowns in China are part of the growing narrative around the risk of a global recession,” said Rodrigo Catril, a National Australia Bank market strategist.

Chinese Premier Li Keqiang held a rare high-profile meeting on Wednesday to support the economy, saying the country would strive to achieve reasonable growth in the second quarter and stem rising unemployment, the Xinhua news agency reported. 

CHINA: China’s central bank said on Thursday it would promote more credit for smaller firms and boost financial institutions’ confidence to lend funds, as policymakers struggle to get the Covid-stricken economy back on track. 

DOLLAR: The dollar hovered near a one-month low on Thursday as minutes from the Federal Reserve’s May meeting confirmed the potential for a pause in rate rises after likely further increases in June and July. 

A weaker greenback makes metals priced in dollars cheaper for holders of other currencies.

PRICES: LME aluminium rose 0.7% to $2 894/t, zinc edged up 0.1% to $3 755.50, lead rose 0.6% to $2 117, while nickel climbed 0.9% to $27 040.

Shanghai aluminium rose 0.3%, zinc slipped 0.5%, lead lost 1.7%, tin tumbled 5.7%, while nickel shed 0.1%.