Copper prices had their worst week in a year, dropping roughly 6.5% as investors fretted that Central Banks may be pushing the world economy into a global recession that would reduce demand for metals. Seen as tied intimately to manufacturing, it can be a bellwether for where the economy is heading.
Among other metals, the outlook was also bleak, as nickel lost 13%, and tin dropped 22%, its biggest weekly fall since at least 2005.
Independent analyst Robin Bhar said, “There is a risk of further losses. A sharp economic slowdown or recession seems to be on the cards.”
Benchmark Copper dropped 0.5% on the London Metal Exchange, to $8,367 per ton as on 1605 GMT after reaching $8,122.50, dropping 25% from a peak in March, and the lowest it has been since February 2021.
Bhar thinks copper could fall all the way to its cost of production, at $7,000-$7,500, but he sees prices rising again later in the decade as tight supply and rising demand for electrification later lift it back up.
Global manufacturing growth is slowing as energy prices, inflation, Chinese lockdowns, and sagging consumer sentiment weigh on the global economy.
The price of tin dropped 10.1% on Friday, to $24,260 per ton which is more than 50% off its high in March. Traders noted because the market for the metal is less liquid than other metals, any selling will have a more profound effect on prices.
LME nickel dropped6.9% to $22,375 per ton. Aluminum dropped 0.8% to $2,457 and was off 2% this week. Zinc fell 3.9% to $3,354.50, off about 5% this week. Lead fell 1.2%, at $1,925, making for almost a 7% weekly fall.
