Copper pushes lower on inflation, recession fears

COPPER prices extended losses on Wednesday (Oct 19) as soaring inflation and the prospect of more interest rate hikes fuelled worries about the global economy and metals demand, while a strong dollar also weighed on the market.

Three-month copper on the London Metal Exchange gave up 0.8 per cent to US$7,365 a tonne in official open-outcry trading after dropping 1.9 per cent on Tuesday.

Data showed on Wednesday that British inflation hit a 40-year peak, while a US Federal Reserve official on Tuesday talked about the need for further rate hikes to contain inflation.

“What we are looking at is an environment where recession is imminent, but has not landed. We keep talking about recession and yet there is no recession,” said Naeem Aslam, chief market analyst at Ava Trade.

“That’s adversely influencing sentiment and industrial metals are not going to perform well in that climate.”

The most-traded November copper contract on the Shanghai Futures Exchange declined 1.1 per cent to US$8,601.85 per tonne.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

Also dampening sentiment was a firmer dollar index, which makes metals priced in the US currency more expensive for buyers using other currencies.

LME aluminium shed 0.6 per cent to US$2,180 per tonne after more inflows of aluminium into LME-approved warehouses.

Data on Wednesday showed arrivals of 82,825 tonnes, bringing the surge in LME aluminium inventories so far this month to 70 per cent.

SEE ALSO

Global metals volumes slide on recession fears, volatile markets

Commodity trader Glencore has delivered significant amounts of Russian-origin aluminium to LME-registered warehouses in Gwangyang, South Korea, two sources with direct knowledge of the matter said on Tuesday.

Among other metals, nickel retreated 0.5 per cent to US$21,765 a tonne and lead eased 2.1 per cent to US$1,971, but zinc added 0.1 per cent to US$2,867.50.

Tin fell 0.6 per cent to US$19,325 despite Indonesian authorities saying on Wednesday they are preparing for a potential ban on tin exports. REUTERS