China-Singapore Jingwei, June 24. The British "Financial Times" reported on the 24th that copper prices fell to a near 16-month low on the 23rd, the latest sign that recession fears have gripped the entire industrial metals market.
The report noted that copper is used for everything from home appliances to electric vehicles, which often makes it seen as a measure of economic activity.Copper prices fell 2% to $8,564 a tonne in early trade on June 23, implying an 11% decline so far in 2022.
The report mentioned that copper prices once climbed sharply, but fell in June due to concerns that the central bank will quickly raise interest rates to curb inflation, etc. will curb demand.
"The Fed is tightening policy at an aggressive pace. The cost of holding copper is getting high. The flagship product in the commodities space is under pressure," Liberum analyst Tom Price was quoted in the report.
On June 22, Federal Reserve Chairman Jerome Powell acknowledged that plans to raise borrowing costs this year could tip the world's largest economy into recession.
The news also weighed on other metals prices, with aluminium down nearly 2% on the morning of June 23, nickel down 1% and tin down 10%, the report showed."A variety of metals have given back their gains this year, with aluminium and copper hitting their lows for the year this week, followed by zinc and nickel, as Chinese demand and high Expected Russian supplies have led to more inventories being deposited on European exchanges."
The report also pointed out that the price of copper in early 2022 was about US$9,800 per ton, and the price of copper rose further to more than US$10,400 per ton in early March due to concerns that the conflict between Russia and Ukraine would affect supply.But those fears ultimately didn’t materialize, and were instead replaced by concerns about the health of the global economy.
The report mentioned that a sharp drop in metal prices has spilled over into the mining sector, with shares of some of the world's largest producers tumbling in June.London-listed Rio Tinto shares fell nearly 13%, while Anglo American shares fell more than 18%.
The report quoted Morgan Stanley analysts reporting that "the macroeconomic backdrop for the mining sector has 'deteriorated' as 'increased efforts by central banks to fight inflation, etc.' continue to dampen demand for various metals. ... Benefiting in two years We believe returns in the sector are set to return to normal after ultra-high margins supported by supply shocks and robust demand.”
The report finally mentioned that Colin Hamilton, an analyst at BMO Capital Markets, said that aluminum prices are expected to be supported by production cuts.Aluminum is a lightweight metal used in everything from beverage cans to airplanes.
It is reported that the large US producer Century Aluminum announced on the 22nd that it will close a 200,000-ton-a-year aluminum smelter in Kentucky in the next 9 to 12 months, citing soaring electricity prices."We see the potential for further reductions in primary aluminium production in the coming months, especially in Europe, which should start to provide some support for prices," Hamilton said.
