Copper Prices Fall As Global Energy Crisis Scares Markets

Copper prices were down on Tuesday as rising energy costs raised concerns that the global economic recovery would be derailed, with stock market declines, but the decline was contained by signs of lower supply.

At 1250 GMT, three-month copper on the London Metal Exchange (LME) was down 0.4% to $ 9,505 a tonne, breaking a three-day winning streak.

Prices rose to an all-time high of $ 10,747.50 in May before beginning to decline as the global economic recovery began to falter.

Logistics bottlenecks have brought copper stocks down to “historically low” levels in regions that use the metal, JPMorgan analysts said in a note.

“This is still a bullish risk in the short term.”, They affirmed, although they acknowledged that the offer remained solid.

“We maintain a bearish bias in prices and forecast an average of US $ 8,900 per ton in the fourth quarter of 2021 and that prices will fall again to an average of $ 8,200 per ton in the fourth quarter of 2022″ He added.

Global markets in Asia closed at a loss, while in Europe stocks grappled with heavy losses in the face of a huge power gap that authorities from Beijing to Chennai were trying to fill.

China Evergrande Group defaulted on its third round of bond payments in three weeks, intensifying market fears about contagion.

On-warrant copper inventories in warehouses registered with the LME have fallen to 65,500 tonnes from almost 240,000 in August.

Stocks in the warehouses of the Shanghai Futures Exchange (ShFE) total 50,062 tonnes, close to 12-year lows and inventories in Chinese customs warehouses have been cut by almost half since July.