London copper drops to nine-month low on recession fears


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London copper prices hit a nine-month

low on Monday, weighed down by fears that a potential global

recession and coronavirus outbreaks in top consumer China could

hammer demand for metals.

Three-month copper on the London Metal Exchange

(LME) was down 1% at $8,875 a tonne by 0726 GMT, its lowest

since Sept. 21.

The most-traded July copper contract in Shanghai

ended daytime trading down 2.3% at 68,000 yuan ($10,172.33) a

tonne.

Economic slowdown fears weighed on base metals, ANZ

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commodity strategists said in a note.

“This comes amid uncertainty around the demand outlook in

China. Renewed outbreaks of COVID-19 have cast doubt on the

recovery from lockdowns that have slowed down industrial

activity. The market also appears to be ignoring supply side

issues.”

Mainland China reported 109 new coronavirus cases for June

19, of which 38 were symptomatic and 71 were asymptomatic, the

National Health Commission said on Monday.

China left its benchmark lending rates for corporate and

household loans on hold, with global central banks’ rate

increases making it tough for Beijing to stimulate a weak

domestic economy by lowering rates.

Last week central banks including the U.S. Federal Reserve

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raised interest rates to contain soaring inflation, reigniting

worries over potential global recession.

Copper, which is used in power and construction and is

widely viewed as a gauge of global economic health, has fallen

more than 18% since scaling a peak of $10,845 in March.

COPPER: Workers at state-owned Chilean miner Codelco, the

world’s largest copper producer, said on Saturday that they

would start preparations for a national strike after the company

announced the closure of its Ventanas smelter.

DATA: China’s May aluminum imports fell 16.4% year on year,

government data showed on Saturday, amid high overseas prices

and weaker domestic consumption.

OTHER METALS: LME aluminum fell 0.5% to $2,485 a

tonne, zinc eased 0.4% to $3,510, lead gained

0.4% to $2,070, nickel was down 0.9% at $25,450, and tin

slid 3.1% to $30,205.

Shanghai aluminum slipped 0.8%, with zinc

falling 1.5%, nickel down 1.7%, lead off 0.2%

and tin retreating by 4%.

($1 = 6.6848 Chinese yuan renminbi)

(Reporting by Brijesh Patel in Bengaluru

Editing by David Goodman)



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