Copper below $8,000 in a gloomy sign for the global economy

Copper fell below $8,000 a ton today, hitting its lowest level since early 2021, as growing fears of a global economic slowdown roiled industrial metals markets, Bloomberg reported.

The metal – widely seen as a barometer of the global economy – fell as much as 3.5% to $7,970.50 a tonne on the London Metal Exchange, extending losses after its worst quarter since the outbreak of the pandemic. Investors appear increasingly convinced that growth is set to weaken amid tighter monetary policy and an energy crisis centered in Europe.

“There are growing concerns about global demand,” Wei Lai, an analyst at TF Futures Co., told Bloomberg from Shanghai. The copper market will face a surplus of around 10% of total supply over the next two years based on a “hard landing” scenario for the US and European economies, with the weak recovery in China unable to compensate for the decline in global demand , he added.

Aluminum and zinc also extended their losses, opening the second half with a negative sign. The LME’s index of six base metals posted its biggest quarterly drop since the 2008 financial crisis, Bloomberg notes.

Copper was at $7,981.50 a tonne on the LME at 09:03am. local time. Aluminum fell 2.4%, while nickel 5.4%. Iron ore also fell in Singapore as fears resurfaced that the Chinese government will impose curbs on steel production at a time of weak demand and rising inventories.

There are some bright spots for metals, however, as demand in China gradually recovers from Covid-19 lockdowns and the government launches measures to stimulate the economy. Troubles in the country’s property market eased in June and manufacturing activity also rebounded at a faster-than-expected pace,