The price of copper falls to 8.888 US per ton, the lowest level for 10 months
The price of copper fell to a 10-month low on Thursday as demand prospects deteriorated after a sharp rate hike by the U.S. Federal Reserve fueled recession concerns and data from China reported weak growth.
Copper for July delivery hit a low of $4.04 a pound ($8,888 a tonne) Thursday morning on the New York Comex market, the lowest since August of last year.
Mining stocks also fell, with BHP Group down more than 5% from the previous week and Freeport-McMoRan down 4%.
“Demand for metals is at risk as accelerated monetary policy tightening by developed economies threatens to cripple economic growth and trigger a possible recession,” said Tom Mulqueen, analyst at Amalgamated Metal Trading.
“Soaring inflation also threatens to dampen spending on consumer goods as the rising cost of living hits disposable income and confidence.”
The Fed raised interest rates by 75 basis points on Wednesday, the biggest hike since 1994, to curb soaring inflation. The U.S. central bank plans to raise interest rates steadily for the rest of 2022.
“A rebound in Chinese demand from the covid-19 lockdowns in the second quarter could offer some respite, but is vulnerable to the continued threat of new outbreaks and restrictions under China’s zero covid approach,” he said. said Mulqueen.
