Copper fell further after capping its fifth consecutive monthly loss, the longest downward streak since the 2008 financial crisis, as global recession fears mounted.
(Bloomberg) — Copper fell further after capping its fifth consecutive monthly loss, the longest downward streak since the 2008 financial crisis, as global recession fears mounted.
The metal has retreated about a third from a record in March following Russia’s invasion of Ukraine. Anxiety remains high that Europe’s energy crisis, tighter monetary policy by the Federal Reserve and China’s Covid Zero strategy will keep hitting demand.
A wave of risk aversion hit markets on Thursday, as the hawkish drumbeat from central banks spurred gains in the dollar. Cleveland Fed President Loretta Mester reiterated the needs to raise the US benchmark rate above 4% by early next year and said she doesn’t anticipate cuts in 2023.
Concerns over demand are outweighing continued challenges on the supply side. Chile, which accounts for more than a quarter of the world’s mined copper, reported an 8.6% decline in production in July from a year earlier. In China, Shanghai’s two-month lockdown earlier this year is still rippling through the economy, with businesses struggling with a sluggish recovery and stalled demand.
The copper market is pricing in rising expectations of more rate hikes by the Fed, Everbright Futures Co. said in a note on Thursday. Covid flare-ups in China have damped market confidence, it said.
Copper fell 0.7% to $7,748 a ton on the London Metal Exchange as of 10:29 a.m. in Shanghai, following a 4.4% slide over the previous two trading sessions. Other base metals were mostly lower, with zinc down 1.1% to $3,420 a ton.
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