Copper prices slipped on Thursday and were set for their biggest quarterly percentage drop since March 2020, hit by worries about a potential recession following a series of interest rate hikes and a slowdown in demand due to lockdowns in top consumer China.
Three-month copper on the London Metal Exchange fell 0.9% to $8,324 a tonne, as of 0721 GMT.
The metal, which is seen as a gauge for the health of the global economy, dropped to its lowest since February 2021 last week and has fallen more than 19% this quarter.
The most-traded August copper contract in Shanghai ended daytime trading down 0.2% at 63,850 yuan ($9,538.11) a tonne.
“The Chinese economy has slowed down as the major metal consuming country was under a lockdown and on the other hand, policy tightening around the world continues to weigh on the complex,” said Kunal Shah, head of research at Nirmal Bang Commodities.
“We may see some stimulus packages by China and it’s going to support metals. However, we are not expecting very big bull run as the demand side is looking bleak to us.”
COVID: Beijing and the commercial hub Shanghai have been returning to normal from June 1 after two months of painful lockdowns to crush outbreaks of the Omicron variant.
GROWTH: Rising inflation and interest rate hikes have fuelled worries about a global recession.
DATA: China’s factory activity snapped three months of decline in June, as authorities lifted a strict lockdown in Shanghai.
SMELTERS: China’s top copper smelters set their floor treatment and refining charges for copper concentrate in the third quarter of 2022 at $80 per tonne and 8 cents per pound.
DOLLAR: The dollar is on track to record its best quarter in over five years. A stronger greenback makes dollar-denominated metals less attractive for buyers holding other currencies.
SANCTIONS: Russian nickel and palladium producer Nornickel said its lawyers were looking at the impact of British sanctions on its major shareholder and chief executive, Vladimir Potanin.
OTHER METALS: LME aluminium dipped 1% to $2,447 a tonne, zinc slipped 2.4% to $3,279.50, and lead eased 0.7% to $1,919.50, nickel fell 0.6% to $23,625, and tin dropped 1% to $26,500
Shanghai aluminium fell 1.4%, zinc dipped 1.2%, nickel added 2.3%, lead rose 0.4%, and tin slipped 2%.
