Copper prices in London fell as much as 3.6% to $7,959 a ton on Friday, diving deeper into a bear market after suffering the worst quarterly loss in a decade.
The commodity, an often seen as a barometer to gauge the global economy, fell to its lowest point since February 2021, as recession fears also hit prices for other key industrial metals, such as aluminum, nickel, iron and zinc .
While copper prices edged back above $8,000 later on Friday, the intraday low marked a decline of 25.6% from a peak above $10,700 a ton in May 2021. For the second quarter that ended on Thursday, copper fell nearly 20%, the worst quarterly decline since 2011.
A copper bear market has happened before each recession in the last 30 years, which could indicate another economic downturn may be underway. It’s used in everything from electrics and electronics to construction, meaning it’s intertwined with the underlying global economy.
Copper’s lackluster performance is a sharp reversal from the early months of 2022, when a surge in demand for goods and production sent prices higher.
The picture has since changed as the Federal Reserve alongside global central banks tighten monetary policy to combat skyrocketing inflation and attempt to slow the economy down.
But metals could reverse course this year as China resurfaces from stringent Covid-19 lockdowns that slowed demand. Activity related to manufacturing ticked up in June, while its property market recovered from previous losses.
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