Copper hit a one-month low, while most industrial metals fell on concerns that rapid monetary tightening and a lockdown in China will depress economic growth and demand.
Benchmark three-month copper on the London Metal Exchange (LME) fell 1.8% to $10,097 a tonne at 1620 GMT ($464.3 a pound, according to Cochilco), a floor not seen since the March 17, and added a third weekly decline.
“We have multiple factors weighing on copper and the other metals, particularly from a macroeconomic standpoint, such as growing concerns about a potential US recession,” said Wenyu Yao, chief commodities strategist at ING Bank.
The head of the US Federal Reserve said Thursday that a half-point interest rate hike “will be on the table” when it meets next month, suggesting aggressive action.
COVID restrictions in China, the world’s top metals consumer, also weighed on the market.
“Initially it was going to be an abrupt lockdown in Shanghai, but it’s been a month now and no one knows when it will end. That’s another big concern,” Yao said.
Shanghai’s industrial output plunged in March, its first monthly decline in two years, after strict lockdown measures halted production at some factories.
Rising copper inventories in LME-licensed warehouses have also held prices back, with their total rising 72% in the past month.
LME zinc rallied after data showed another large decline in LME stocks not earmarked for delivery. On-warrant stocks fell 25% to 33,975 tonnes, the lowest level since November 2019.
But prices changed trend and fell 1.6% to $4,380 a tonne.
Also weighing on the market was the rise in the dollar index, which made metals in that currency more expensive for buyers using other currencies.
Peru said Friday that a group of indigenous communities had ended a protest against Southern Copper Corp.’s Cuajone mine that had forced production to be suspended for more than 50 days.
LME aluminum fell 2% to $3,232 a tonne, nickel fell 2.1% to $33,215, lead fell 0.9% to $2,380 and tin lost 2.3% to $41,875.