At a 20-month low, copper ‘touched’ up to -5%

Copper prices fell to their lowest level in nearly 20 months on Wednesday, as growing worries about an economic recession roiled the industrial metals market, weighing on demand.

In particular, the copper on the London Metal Exchange fell as much as 4.9% to $7,291.50 a tonne, the lowest level since Nov. 25, 2020. It then pared losses to 1.9% to $7,526.

“The strengthening of the dollar yesterday reignited recession fears, pulling the rug out from under the market,” said Ole Hansen, head of commodities strategy at Saxo Bank.

“The decline is also due to China with the chaos created by the local lockdowns in China to deal with the coronavirus. And we are in the summer, the time when the market can easily find itself on the wrong side, with liquidity drying up.”

Copper’s recovery from 20-month lows raises the question of whether this was the “bottom” for copper, analyst Al Munro commented. “Downtrends remain and most are looking for a copper reaction,” he added.

As for the rest of the industrial metals, the aluminum added 1.1% to $2,417 a tonne, after touching its lowest level since June 2021, while zinc rose 0.6% to $3,009 a tonne, recovering from its lowest price since last August.

The nickel fell by 3.7% to 21,815 dollars and o tin slipped 4.4% to $24,850.