Copper sinks to 17-month low as slowdown fears mount
Copper prices dropped to a fresh 17-month low on Monday as renewed lockdowns in top consumer China and the prospects of aggressive rate hikes stoked fears of global economic slowdown, denting demand for metals.
Three-month copper on the London Metal Exchange was down 1.4% at $7 938/t, as of 07:17 GMT, after hitting its lowest since early-February 2021 at $7 918 earlier in the session.
The most-traded August copper contract in Shanghai ended daytime trading down 3.1% to 60 660 yuan a tonne.
“Softening demand and concerns over a growth slowdown are dragging on the sector. We think improving Chinese economic activity will stabilise prices,” ANZ analysts said in a note.
“Inventories for metals are shrinking to multi-year lows. Supply challenges due to higher energy prices and other operational issues will allow little room for inventories build.”
From the United States to the euro zone, activity at factories slowed to levels last seen during the initial wave of the pandemic.
Adding to demand worries, cities in eastern China tightened Covid-19 curbs on Sunday as coronavirus clusters emerge, posing a new threat to the country’s economic recovery under the government’s strict zero-Covid policy.
