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Copper set for steep weekly loss as slowdown fears cloud demand outlook

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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

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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

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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.

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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

manufacturing sector.

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)



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