Demand concerns drag copper and aluminum to 3-month lows

Follow-ups -eshrag News:

Tue, 2022-05-03 14:30

Prices of copper and aluminum fell to three-month lows on Tuesday as weak manufacturing data, COVID-19 outbreaks in China and rising interest rates stoked fears that demand will soften.

Benchmark copper on the London Metal Exchange (LME) was down 2.5 percent at $9,525.50 a ton at 1055 GMT. LME aluminum was also down 2.5 percent at $2,975 a ton.

Both metals rallied during 2020 and 2021 and reached record highs in March, when Russia’s invasion of Ukraine raised supply fears.

Copper is now down around 12 percent from its high of $10,845 and aluminum has fallen around 25 percent from its peak of $4,073.50.

“Sentiment has become gloomier,” said Commerzbank analyst Daniel Briesemann, pointing to slowing factory activity, COVID lockdowns and the war in Ukraine, which is pushing up energy prices and hurting industry.

Manufacturing activity contracted in China, grew at its slowest pace in more than 1-1/2 years in the United States and stalled in the euro zone in April, data showed.

Lockdowns have worsened the economic outlook for China, the biggest metals consumer. Fitch cut its China GDP growth forecast for 2022 to 4.3 percent from 4.8 percent.

Rising interest rates have helped boost the dollar to a 20-year high against a basket of major peers, making metals costlier for buyers with other currencies.

The global copper market is set for surpluses of 142,000 tons this year and 352,000 tons in 2023, the International Copper Study Group (ICSG) said.

LME zinc was down 2.1 percent at $4,019 a ton, nickel fell 1.6 percent to $31,255, lead rose 0.5 percent to $2,271.50 and tin was up 0.5 percent at $40,440.

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Business & Economy
supply chain

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