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Copper heads for worst weekly loss in a year, nickel and tin plunge
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LONDON (Reuters) – Copper prices were on Friday set for their biggest weekly fall in a year, down around 6.5%, as investors worried that efforts by central banks to stem inflation will stifle global economic growth and reduce demand for metals.
LONDON (Reuters) – Copper prices were on Friday set for their biggest weekly fall in a year, down around 6.5%, as investors worried that efforts by central banks to stem inflation will stifle global economic growth and reduce demand for metals.
Other industrial metals also tumbled, with nickel shedding around 13% this week and tin sliding 22%, its biggest weekly slump since at least 2005.
“There is a risk of further losses,” said independent analyst Robin Bhar. “A sharp economic slowdown or recession seems to be on the cards.”
Benchmark copper on the London Metal Exchange was 0.5% lower at $8,367 a tonne at 1605 GMT after touching $8,122.50, down 25% from a peak in March and the lowest level since February 2021.
Bhar said copper, used in power and construction, could fall towards its cost of production, around $7,000-$7,500, but tight supply and rising demand for use in electrification later in the decade will lift prices.
Federal Reserve Chair Jerome Powell said this week that the U.S. central bank would rein in 40-year-high inflation even if doing so pushes up unemployment and risks an economic slowdown.
Global manufacturing growth is slowing, partly due to coronavirus restrictions in top producer China.
However, some investors think slowing growth and falling commodities prices should reduce inflationary pressure and the need for aggressive interest rate rises. [MKTS/GLOB]
Tin prices were down 10.1% on Friday at $24,260 a tonne, down more than 50% from its high in March, having earlier fallen as low as $22,980.
Noting that the market for the metal used in solder for electronics is smaller and less liquid than for other metals, traders said selling was having a bigger effect on prices.
LME nickel was down 6.9% at $22,375 a tonne and trading at its lowest level in five months.
Aluminium fell 0.8% to $2,457 and was down around 2% this week. Zinc slipped 3.9% to $3,354.50 and was down around 5% this week. Lead was 1.2% lower at $1,925 and heading for a 7% weekly loss.
(Reporting by Peter Hobson,; Additional reporting by Brijesh Patel in Bengaluru; Editing by Paul Simao and Emelia Sithole-Matarise)
Copper is a reddish-brown metal that is widely used in electrical wiring, plumbing, and construction due to its excellent conductivity and malleability.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
A central bank is a national institution that manages a country's currency, money supply, and interest rates, often overseeing monetary policy.
Demand refers to the quantity of a product or service that consumers are willing and able to purchase at various prices.
A recession is a significant decline in economic activity across the economy that lasts for an extended period, typically visible in GDP, income, employment, and trade.
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