Copper falls to 15-month lows on fears of an economic recession

Copper prices hit their lowest level in more than a year on Wednesday on growing fears that rapid interest rate hikes will push the global economy into recession as China faces COVID-19 lockdowns. , which affects the demand for metals.

Aluminum and other industrial metals joined the sell-off in risky assets, which also weighed on oil and stock markets.

Three-month copper on the London Metal Exchange fell 3% to $8,725 a tonne by 10:00 GMT, after hitting a low not seen since March 5, 2021 at $8,691.

Shanghai’s most-traded copper contract for July delivery ended the day down 1.6% at 67,060 yuan ($9,971.60) a tonne.

“Industrial metals are certainly in the spotlight, with China still on the slow path to recovery and added concern about the global outlook”said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

China’s strict “zero-COVID” policy to prevent the spread of the coronavirus has hit the economy and manufacturing sector in the world’s top metals consumer.

“Last week’s aggressive rate hike by the FOMC is not without raising concerns about whether economies around the world can cope with that kind of rapid rise.”Hansen added.

The technical outlook for many LME metals was deteriorating and a break below $8,700 support in copper would trigger further losses, it added.

The dollar index rose, making greenback-traded commodities more expensive for buyers using other currencies.

Among other base metals, LME aluminum fell 2.1% to $2,480 a tonne, zinc fell 1.6% to $3,535, lead lost 2.1% to $2,021.50, Nickel fell 3.7% to $25,000 and tin fell 4.8% to $29,830.