Copper price reaches 17-month low due to restrictions in China

Copper prices fell to a 17-month low on Monday as new COVID restrictions in China, the metal’s top consumer, slowing global manufacturing activity and rising inventories sparked demand and demand concerns. sales.

Benchmark copper on the London Metal Exchange (LME) was slightly lower, trading at $8,044 a tonne by 1040 GMT.

Prices for the metal, used in energy and construction, previously fell to $7,918, their lowest level since February 2021.

“China manufacturers have had a very hard time. People fear inflation and recession, but the probability of a recession is less than 50%,” said Dan Smith, managing director of Commodity Market Analytics. “The market needs to find a bottom, but industrial metals are starting to look like a good value.”

Eastern Chinese cities tightened COVID-19 restrictions on Sunday as clusters of cases emerged, posing a new threat to the country’s economic recovery under the government’s strict zero-COVID policy.

The global manufacturing sector suffered in June as rising prices and a darker economic outlook made consumers hesitant to make purchases, while Russia’s invasion of Ukraine added to supply chain disruptions. , according to the polls.

Copper stocks in LME authorized warehouses increased by 10,100 tons to 136,950 tons. They are up more than 20% in the last week.

Economic activity is being hit by rising inflation and interest rate hikes in many countries, including the United States, where the Federal Reserve is expected to make another 75 basis point rate hike this month.

Among other base metals, aluminum was up 0.5% at $2,457, zinc was up 2.6% at $3,109, lead was down 0.7% at $1,920, tin was up 0.9% at $26,900 and Nickel advanced 4.3% to $22,770 a tonne.