LONDON: Copper prices sagged to their lowest since mid-December and other industrial metals fell sharply as tightening COVID-19 restrictions in top consumer China and fears of weaker global economic growth dampened the outlook for demand.
Benchmark copper on the London Metal Exchange (LME) was down 1.9% at $9,232 a tonne at 1602 GMT.
The metal used in power and construction has fallen around 15% from March’s record high of $10,845, when investors expected strong demand and feared the Ukraine conflict would disrupt supply of the metal from Russia.
China’s lockdowns, rising interest rates in the United States and elsewhere and a strong dollar are putting pressure on copper, Danke Bank analyst Jens Pedersen said.
But Chinese stimulus measures later in the year could revive metals prices, he added. “In China, it will have to get worse before it gets better.” COVID: China’s two biggest cities tightened COVID-19 curbs on their residents on Monday. The restrictions have already hit manufacturing output.
TRADE: China’s export growth in April slowed to single digits, the weakest in almost two years, while imports barely changed. Copper imports fell 4% year-on-year.
EURO ZONE: Investor morale in the euro zone fell in May to its lowest level since June 2020, a survey showed.
MARKETS: Stocks fell again and the dollar rocketed to a new two-decade high, making metals costlier for buyers with other currencies.
INVENTORIES: Copper stocks in LME-registered warehouses have risen to 169,175 tonnes from around 70,000 tonnes in early March, easing supply concerns. TECHNICALS: A break below support at $9,163 a tonne could see copper fall to $8,922, Reuters technical analyst Wang Tao said.
TIN: China’s refined tin output from major smelters surged 14.4% in April from the previous month, researchers at Antaike said.
METALS PRICES: LME aluminium was 2.9% lower at $2,760 a tonne, down more than 30% from its March peak.
Nickel tumbled 6.5% to $28,110, zinc fell 4.4% to $3,607, lead slipped 2.9% to $2,167 and tin was 6.1% lower at $36,950.