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LONDON: Copper prices tumbled on Thursday to their lowest in seven months and other industrial metals fell as traders worried that a slowing global economy would require less metal.

With inflation surging and interest rates rising, growth fears also pushed down oil prices and stock markets hit a 1-1/2-year low.

The dollar, meanwhile, reached a new 20-year high against a basket of major rivals, making dollar-priced metals costlier for buyers with other currencies.

Benchmark copper on the London Metal Exchange (LME) was down 3.5% at $9,017 a tonne at 1102 GMT and down 17% from a record high of $10,845 reached in March.

LME tin was down 8% at $32,900 a tonne.

“Demand hopes have given way to demand concerns,” said Commerzbank analyst Daniel Briesemann.

COVID lockdowns in China, the top metals consumer, war in Ukraine and aggressive interest rate rises were all hurting the outlook for the economy and metals demand, he said, but added that the sell-off was likely overdone in the short term.

Copper gains as China’s COVID-19 cases ease, but demand still at risk

Copper is used in power and construction and will be needed to transition from fossil fuels to electrification.

Inflation: U.S. consumer prices rose 8.3% in April year-on-year, suggesting interest rate rises to rein in inflation will continue.

Hikes: Central bankers in Britain and the Euro zone suggested interest rates would increase. Britain’s economy unexpectedly shrank 0.1% in March.

Yuan: The yuan fell to its weakest against the dollar since September 2020, making metals costlier in China.

Covid: Shanghai and Beijing are wrestling with COVID-19 outbreaks.

China Construction: Sunac China became the latest Chinese property developer to default on a bond payment, adding to a wave of defaults in the sector.

China Stimulus: A senior Chinese official said the country is eyeing new incremental policies to prop up growth and will take steps when necessary.

Zinc: China’s refined zinc output at 52 major smelters rose in April from the previous month.

Prices: LME aluminium fell 1.6% to $2,733 a tonne, zinc slipped 3.6% to $3,535, nickel was down 0.4% at $27,700 and lead was 1.7% lower at $2,082.

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