Copper prices in London headed on Friday
for their worst week in a year, while prices in Shanghai were on
track for the sharpest weekly fall since March 2020 as growing
concerns over recession and weak economic readings pointed to a
likely impact on demand.
Three-month copper on the London Metal Exchange was
flat at $8,399 a tonne, as of 0344 GMT, after dropping to its
lowest since February 2021 at $8,326 on Thursday. The contract
lost 6.2% so far this week.
The most-traded July copper contract in Shanghai
fell 3.5% to 64,080 yuan ($9,572.47) a tonne and was down 7.9%
for the week.
“We expect base metals to extend losses following their
recent fall caused principally by the Fed’s tightening and
China’s economic slowdown on the back of the country’s
zero-COVID policy,” Fitch Solutions said in a note.
“A stronger U.S. dollar and weaker global economic growth
will cause a significant drop in demand across base metals.
Risks are broadly skewed to the downside.”
The U.S. Federal Reserve’s commitment to reining in
40-year-high inflation is “unconditional,” its chair Jerome
Powell told lawmakers and acknowledged that sharply higher
interest rates may push up unemployment.
Manufacturing growth is slowing from Asia to Europe as
China’s COVID-19 curbs and Russia’s invasion of Ukraine disrupt
supply chains, while the growing risk of a recession in the
United States poses a new threat to the global economy.
Copper, used in power and construction sectors and is seen
as a gauge for global economic health, has fallen more than 20%
since scaling a peak of $10,845 in March.
POLL: Japan’s factory output probably fell in May for a
second successive month due to supply chain disruptions caused
by strict COVID lockdowns in China, a Reuters poll showed.
CHILE: Union leaders at Chile’s state-owned mining firm
Codelco, the world’s largest copper producer, reached an
agreement with the company to end a national strike over the
decision to close a smelter located in a highly polluted area.
COVID: Mainland China reported 143 new coronavirus cases for
June 23, compared with 135 new cases a day earlier. COVID
restrictions in China have battered the country’s economy and
ILZSG: The global zinc market moved to a surplus of 10,900
tonnes in April from a revised deficit of 31,700 tonnes a month
earlier, data from the International Lead and Zinc Study Group
PRICES: LME aluminum fell 0.4% to $2,467 a tonne,
zinc gained 0.2% to $3,499.50, lead added 0.2%
to $1,950.50, and tin dropped 1.8% to $26,500 after
hitting its lowest since April 2021 in the previous session.
Shanghai aluminum lost 1.4%, zinc fell
2.6%, nickel dropped 7.5%, lead was down 1.3%
and tin slumped 7.2%.
($1 = 6.6942 Chinese yuan)
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu and Sherry Jacob-Phillips)