Copper sinks to fresh 17-month low, dragged down by continued recession fears

Jul. 05, 2022 9:38 AM ETFreeport-McMoRan Inc. (FCX), COPX, HG1:COMCMC, CLF, NUE, MT, X, VALE, BHP, RIO, SCCO, TECK, JJCTF, JJC, CPER, TECK.B:CABy: Carl Surran, SA News Editor23 Comments

Close-up of new and shiny сopper pipe.

SimoneN/iStock via Getty Images

Copper prices extend their recent decline to hit fresh 17-month lows on Tuesday while the dollar surged, as global recession fears continue to weigh on the demand outlook for commodities.

According to Reuters, three-month copper (HG1:COM) on the London Metal Exchange recently -2% to $7,849/metric ton, its lowest since February 2021 and down for a fourth straight session.

In early trading: (NYSE:FCX) -6.7%, (TECK) -5.7%, (SCCO) -5.2%, (RIO) -5.2%, (BHP) -3.6%, (VALE) -4.1%.

Steel producers also open with sharp losses: (X) -5.3%, (CLF) -4.6%, (MT) -5.9%, (NUE) -3.8%, (CMC) -4.3%.

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

Meanwhile, the dollar index surged to the highest in 20 years, making commodities priced in dollars more expensive for buyers using other currencies.

There's no return on commodities so speculators are rotating their money out of commodities into U.S. dollars, property or any U.S. dollar asset outside of commodities that will provide a return, Tom Price, head of commodities strategy at Liberum, told Reuters, adding that he expects copper will continue to drop to $7K/ton within 3-6 months.

Spooked by recession fears, copper prices plunged more than 20% in Q2, the biggest quarterly decline since 2011.

Recommended For You

Comments (23)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.