METALS-Copper hits 17-month low on Chinese restrictions, manufacturing data

(Redesign, add comment, London deadline)

By Pratima Desai

LONDON, July 4 (Reuters) – Copper prices fell to their lowest level in 17 months on Monday, as new COVID restrictions in China, the main consumer, slowing global manufacturing activity and a rise in inventories sparked demand concerns and a massive sell-off.

Benchmark copper on the London Metal Exchange (LME) fell slightly to $8,044 a tonne at 10:40 GMT.

Prices for the metal used in power and construction earlier fell to $7,918, its lowest since February 2021.

“Chinese manufacturers have been through tough times. People are afraid of inflation and recession, but the probability of a recession is less than 50%,” said Dan Smith, managing director of Commodity Market Analytics.

“The market needs to find a bottom, but industrial metals are starting to look like good value.”

COVID: Cities in eastern China tightened COVID-19 restrictions on Sunday as coronavirus clusters emerged, posing a new threat to the country’s economic recovery under the government’s strict zero COVID policy .

ACTIVITY: Global manufacturing struggled in June as rising prices and a bleaker economic outlook made consumers reluctant to shop, while Russia’s invasion of Ukraine deepened concerns. supply chain disruptions, according to surveys.

STOCKS: Copper stocks in LME approved warehouses jumped from 10,100 tonnes to 136,950 tonnes. They have increased by more than 20% over the past week.

INFLATION: Economic activity is hitting inflation soaring and interest rates are rising in many countries, including the United States, where the Federal Reserve is expected to make another 75 basis point rate hike this month- this.

POSITIONING: Marex Analytics believes that short positions in copper – betting on lower prices – are as important as they were in 2015, when economic growth in China slowed to its lowest level in 25 years.

As of the close of business on June 30, the copper short was 1.5 million or 43.6% open interest from a peak of 3.1 million tonnes and 72.2% in 2015 and from around a million tonnes and 29.8% on June 23, Marex said.

OTHER METALS: Aluminum rose 0.5% to $2,457, zinc
gained 2.6% to $3,109, leading slipped 0.7% to $1,920, tin added 0.9% to $26,900 and nickel
climbed 4.3% to $22,770 per tonne.

(Reporting by Pratima Desai; additional reporting by Brijesh Patel in Bengaluru; Editing by Jason Neely) (([email protected])) (( For related news and awards, click on the codes in brackets: price overview LME

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