Copper prices languished near 17-month lows on Tuesday, despite positive economic data from China and Japan, as a cocktail of factors from aggressive interest rates, potential recession and rising inventories dominated traders’ mood.
Three-month copper on the London Metal Exchange was down 0.4 percent at $7,973 a ton, after hitting its lowest since February 2021 at $7,918 on Monday.
The most-traded August copper contract in Shanghai fell 0.6 percent to 60,870 yuan ($9,094.58) a ton by the midday trade.
“There was a bull trap set early at the open today as S&P and Nasdaq futures pointed higher. However, the rest of the bearish sentiment is just because of recession fear, which is almost certain for most US and Europe already,” a Singapore-based metals trader said.
Pulling down economic activity and inducing recession fears are soaring inflation and interest rate hikes in many countries including the United States where the Federal Reserve is expected to deliver another 75-basis-point hike this month.
Meanwhile, copper stocks in LME-approved warehouses jumped 10,100 tons to 136,950 tons. They have risen more than 20 percent over the past week. — Reuters
