Demand angst puts copper on track for biggest drop since 2018

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LONDON – Copper prices fell on Friday, heading for their first annual decline since 2018 on concerns over demand created by a spike in COVID cases in major consumer China, a slowdown in global growth and an increase stocks.

Benchmark copper on the London Metal Exchange (LME) was down 0.5% at $8,375 a tonne at 1702 GMT. Prices for the metal widely used in the energy and construction industries are on track to fall 13% this year.

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“In the United States, there are fears that the Fed will push the economy into recession; in Europe, the energy crisis has put a strain on businesses and consumers,” said Michael Widmer, analyst at Bank of America.

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« In China, various issues, including the rollout of the COVID lockdowns that had such a pronounced impact on activity early in the year, have been a concern. »

China’s lifting of restrictions, following widespread protests, means COVID is spreading largely out of control and likely infecting millions a day, some international health experts say.

Clues to the outlook for industrial metals demand will come from surveys of purchasing managers at manufacturing companies around the world over the coming days.

Copper stocks in warehouses recorded on the LME at 88,925 tonnes have climbed 7,525 tonnes since Friday. Warrants canceled – metal intended for delivery – at 13% of the total against 33% on December 7.

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Rising inventories are expected to be a trend through 2023 as demand slows further and surpluses increase.

Elsewhere, the price of lead rose 0.9% to $2,294 a tonne.

Battery metal prices hit $2,302.50 a tonne on Wednesday, the highest since May 5, on supply concerns and dwindling inventories in LME-approved warehouses, which are nearing lows. 15-year low at 25,000 tonnes.

Warrants canceled at 49% of the total and large holdings of warrants and spot contracts suggest more lead should be delivered.

In other metals, aluminum fell 1.2% to $2,376, zinc fell 0.5% to $2,970, tin fell 0.1% to $24,900 and nickel fell 1% to $29,960. (Reporting by Pratima Desai; Additional reporting by Brijesh Patel in Bengaluru; Editing by Barbara Lewis, Kirsten Donovan)


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