Copper slips to over 8-month low on recession fears

London copper prices hit a more than eight-month low on Monday on worries that a potential global recession would dent demand for metals, although a pullback in the dollar and supply concerns limited losses.

Three-month copper on the London Metal Exchange was down 0.1% at $8,955 a tonne by 0544 GMT, after falling to its lowest since Oct. 1 in early Asian trade.

The most-traded July copper contract in Shanghai fell 1.7% to 68,400 yuan ($10,241.36) a tonne.

Economic slowdown fears weighed on base metals, ANZ commodity strategists said in a note.

“This comes amid uncertainty around the demand outlook in China. Renewed outbreaks of COVID-19 have cast doubt on the recovery from lockdowns that have slowed down industrial activity. The market also appears to be ignoring supply side issues.”

China stood pat on its benchmark lending rates for corporate and household loans, with global central banks’ rate increases making it tough for Beijing to stimulate a weak domestic economy by lowering rates.

Last week, major central banks, including the U.S. Federal Reserve, hiked interest rates to contain soaring inflation and re-ignited worries that they will tip the world into recession.

DOLLAR: The dollar index fell 0.3% against its rivals, making greenback-priced metals less expensive for overseas buyers. [USD/]

COPPER: Workers at Chilean state-owned miner Codelco, the world’s largest copper producer, said on Saturday they would start preparations for a national strike after the firm announced the closure of the troubled Ventanas smelter.

DATA: China’s aluminium imports in May fell 16.4% from the same month a year earlier, government data showed on Saturday, amid high overseas prices and weaker domestic consumption.

LME: The LME approved rules on Friday for members to report all over the counter (OTC) positions, a move taken after off-exchange trading was partly blamed for a wild spike in nickel prices in March.

OTHER METALS: LME aluminium was up 0.3% at $2,506 a tonne, zinc was steady at $3,524.50, lead gained 0.1% to $2,063.50, and tin eased 0.3% to $31,100.

Shanghai aluminium slipped 0.4%, zinc fell 1.7%, nickel slipped 0.4%, lead fell 0.6%, and tin dipped 3.2%.
Source: Reuters (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)