Copper tumbles to worst weekly loss in a year

BY ONOME AMUGE

Copper plunged to its biggest weekly fall in a year, as investors worried over prospects of a recession driven by rising inflation, while efforts by central banks to bring down inflation hurt demand for the bellwether industrial metal.

Global manufacturing growth also led to a fall in demand, partly due to Covid-19 restrictions in China, the world’s largest producer and consumer of the metal.

Benchmark copper on the London Metal Exchange (LME) traded 1.4 percent lower at $8,290 a tonne in official trading after touching $8,220, down nearly 25 percent from a surge in March and the lowest level since February 2021.

Robin Bhar, an independent analyst, said there is a risk of further losses as a sharp economic slowdown or recession seems to be on the cards.

According to Bhar, the red metal, used in power and construction, could fall towards its cost of production, around $7,000-$7,500. He added that tight supply and rising demand for use in electrification later in the decade would lift prices.

Noting that the market for the metal used in solder for electronics was smaller and less liquid than for other metals, traders said selling was having a bigger effect on prices.

Other industrial metals also traded lower in the global market as tin was down 10 percent to $24,275 a tonne, losing over 50 percent from its high in March, having earlier dropped to $22,980 a tonne.

Aluminium shed 1.1 percent to $2,450 a tonne and was down 2 percent for the week. Zinc declined 3.1 percent to $3,384 a tonne, and was down around 4 percent for the week. Lead slipped 2.4 percent lower at $1,900 a tonne to record 7 percent weekly loss, while nickel traded at its lowest price in five months as it fell 5.1 percent to $22,825 a tonne.