Base metals tumble as weak manufacturing data sparks slowdown concerns

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Copper and aluminum prices fell to three-month lows on Tuesday, on worries over softening demand in light of slowing manufacturing activities in China and the U.S., along with a stronger dollar, expected interest rate hikes in the U.S., and the war in Ukraine, which is pushing up energy prices and hurting industry.

London Metal Exchange benchmark copper (HG1:COM) recently traded -2.5% at $9,525.50/metric ton, and aluminum (LMAHDS03:COM) also -2.5% at $2,975/ton; copper is now down 12% from its March high of $10,845 and aluminum has dropped 25% from its peak of $4,073.50.

Potentially relevant tickers include (RIO), (BHP), (VALE), (FCX), (TECK), (SCCO), (HBM), (AA), (CENX), (OTCQX:FSUMF), (OTC:ANFGF), (OTCPK:GLCNF), (OTCPK:GLNCY), (OTCQX:AAUKF), (OTCQX:NGLOY)

ETFs: (COPX), (CPER), (JJCTF), (JJC), (JJU)

"Sentiment has become gloomier," Commerzbank's Daniel Briesemann said, according to Reuters.

Zinc, nickel and lead also trade lower in London while tin ticks higher.

The International Copper Study Group issued a new forecast for a global copper market surplus of 142K metric tons this year and 352K tons in 2023.

"World mine production this year is expected to benefit from additional output from new and expanded mines as well as an improvement in the general situation regarding the pandemic," the ICSG said.

Goldman Sachs analysts said last month that higher copper prices are "an inevitability," forecasting new record highs by mid-year.