Advertisement
Advertisement

Copper steadies, but recession fears dominate mood

By:
Reuters
Published: Jun 27, 2022, 11:38 UTC

By Pratima Desai LONDON (Reuters) - Copper prices steadied on Monday as sentiment improved after top consumer China eased COVID restrictions, but fears of a global recession, rising prices and higher interest rates dominated the mood in industrial metals markets.

A worker at the Codelco Ventanas copper smelter in Ventanas, Chile

By Pratima Desai

LONDON (Reuters) – Copper prices steadied on Monday as sentiment improved after top consumer China eased COVID restrictions, but fears of a global recession, rising prices and higher interest rates dominated the mood in industrial metals markets.

Benchmark copper on the London Metal Exchange was little changed at $8,377 a tonne as of 1053 GMT. Prices of the metal, used as a gauge of economic health by investors, touched $8,122.50 a tonne on Friday, the lowest since February 2021.

“Copper is supported by optimism around the lifting of COVID-19 restrictions in China,” said Giles Coghlan, analyst at broker HYCM. “But it’s hard to see whether it will last as it all depends on whether a global recession can be avoided.”

COVID: Beijing said it would allow schools to resume in-person classes and Shanghai’s top party boss declared victory over COVID-19 after the city reported zero new local cases for the first time in two months.

GROWTH: Soaring inflation, interest rate hikes, expectations of further rate increases and the damage to growth and demand have seen prices of equities and commodities plummet in recent weeks.

ZINC: A small rise in stocks in LME registered warehouses, up 3,175 tonne since last Monday to 81,725 tonne, is weighing on prices of the metal used to galvanise steel.

Three-month zinc was down 0.9% at $3,318 a tonne.

Easing concern about supplies on the LME market saw the premium for cash over the three-month zinc contract fall back to $135 a tonne on Friday from above $200 a tonne the day before.

But zinc availability on the LME market will remain a problem as cancelled warrants — metal earmarked for delivery — at 78% of the total indicate more metal is due to leave LME warehouses over the coming weeks.

DOLLAR: Industrial metals overall were supported by a weaker greenback, which makes dollar-priced commodities cheaper for holders of other currencies. [FRX/]

OTHER METALS: Aluminium was up 0.2% at $2,461 a tonne, lead gained 3% to $1,973, tin rose 7.3% to $26,395 and nickel climbed 4.4% to $23,390.

(Reporting by Pratima Desai; additional reporting by Brijesh Patel in Bengaluru; editing by Vinay Dwivedi)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement