Industrial metals prices fell on Tuesday, after rising coronavirus cases in China sparked fresh demand concerns just as the global economic growth outlook worsened on looming US interest rate hikes.
Three-month copper on the London Metal Exchange shed 2.8 percent to $7,931 a ton, and the most-traded October copper contract on the Shanghai Futures Exchange declined 1.8 percent to 62,240 yuan ($8,993.70) a ton.
Authorities in China’s southern city of Shenzhen shut the world’s largest electronics market of Huaqiangbei and suspended service at 24 subway stations on Monday in a bid to curb a COVID-19 outbreak.
China’s strict lockdowns earlier this year had hurt growth and demand for metals in their biggest consuming market. Market participants had expected the country’s COVID-19 outbreaks to ease and metals consumption would eventually improve.
US Federal Reserve Chair Jerome Powell on Friday signaled a painful period of slow economic growth ahead, as the central bank signaled it would further raise interest rates to tackle high inflation in the world’s biggest economy.
Higher interest rates would boost the dollar, which makes greenback-priced metals more expensive and less attractive to holders of other currencies, and slow economic growth and metals demand.
ShFE lead hit a more than six-week low of 14,860 yuan a ton, nickel hit its lowest since July 29 of 162,850 yuan a ton, aluminum touched a one-week low of 18,345 yuan a ton and zinc lost 1.8 percent to 24,805 yuan a ton. – Reuters
