Copper slides to lowest since March 2021 on firm dollar, slowdown fears

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London copper prices tumbled on

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Wednesday to their lowest level since March 2021, dragged down

by a robust U.S. dollar and weaker financial markets as fears

over a global economic slowdown dented investor sentiment.

Three-month copper on the London Metal Exchange

slipped 3% to $8,725.50 a tonne by 0718 GMT, after falling to

its lowest since March 5, 2021 at $8,691.

The most-traded July copper contract in Shanghai

ended daytime trading 1.6% lower to 67,060 yuan ($9,971.60) a

tonne.

Caught in copper’s slipstream, LME aluminum fell 2%

to $2,483.50 a tonne, zinc slipped 1.3% to $3,544, lead

dipped 1% to $2,044.50, nickel lost 3.6% to

$25,020, and tin dropped 3.8% to $30,140.

“Base metals remain pressured by a challenging demand

outlook related to China COVID-19 lockdowns and to monetary

policy tightening raising recession fears over the trade-off

between inflation and growth,” Standard Chartered wrote in a

note.

“We expect the base metals complex to continue to take its

cues from macro developments, USD moves, external market moves

and risk appetite trends.”

Asian stocks slipped in volatile trade, failing to extend

Wall Street’s rally as persistent worries about interest rates

and inflation remained a key focus for investors.

The dollar index jumped 0.5% against its rivals,

making greenback-priced commodities more expensive for buyers

using other currencies.

INTEREST RATES: Aggressive rate hikes by major central banks

to combat soaring inflation have raised prospects of an economic

slowdown.

POLL: The U.S. Federal Reserve will deliver another

75-basis-point rate hike in July, followed by a

half-percentage-point rise in September, according to economists

polled by Reuters.

ICSG: The world refined copper market showed 3,000-tonne

surplus in April, compared with a 22,000-tonne deficit in March,

the International Copper Study Group said in its latest monthly

bulletin on Tuesday.

COVID: China reported 126 new coronavirus cases for June 21.

China’s strict “zero-COVID” policy to prevent the spread of the

coronavirus has battered the country’s economy and manufacturing

sector.

TIN: Major tin exporter Indonesia is planning to raise the

level of a royalty tariff imposed on the production of tin and

bring in a progressive structure tied to international prices.

PRICES: Shanghai aluminum lost 1.5%, zinc

was up 0.1%, nickel slipped 5%, lead gained

0.2%, and tin fell 5.1%.

($1 = 6.7251 Chinese yuan)

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu

Sahu and Sherry Jacob-Phillips)