Copper lurches lower as dollar jumps and speculators flee

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LONDON — Copper prices crumbled to their

lowest in 17 months on Tuesday as the dollar surged, drawing

investment flows away from commodities as fears of recession

continued to bubble.

Three-month copper on the London Metal Exchange

dropped 2% to $7,849 a tonne by 1030 GMT, its lowest since

February 2021 and down for a fourth straight session.

“The base metals are still under a huge amount of pressure

and we see more downside to come,” said Tom Price, head of

commodities strategy at Liberum, adding that he expected copper

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to decline to $7,000 a tonne within three to six months.

The dollar index soared to the highest in two

decades, making commodities priced in the U.S. currency more

expensive for buyers using other currencies.

“There’s no return on commodities so speculators are

rotating their money out of commodities into U.S. dollars,

property, any U.S. dollar asset outside of commodities that will

give you a return,” Price said.

The most-traded August copper contract in Shanghai

ended daytime trading down 1.9% at 60,110 yuan ($8,975.66) a

tonne.

* Cities in eastern China tightened COVID curbs as

coronavirus clusters emerged.

* China will set up a state infrastructure investment fund

worth 500 billion yuan ($74.7 billion) to spur infrastructure

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spending and revive a flagging economy.

* China’s services activity grew at the fastest rate in

almost a year in June as easing COVID curbs revived demand,

while Japan’s service sector activity expanded at the fastest

pace in more than eight years.

* Chile’s total copper production fell 2.55% in May to

478,800 tonnes, government body Cochilco said on Monday.

* LME aluminum fell 3% to $2,389.50 a tonne, zinc

dropped 2.7% to $3,032.50, lead slipped 0.7% to

$1,943, nickel shed 1.2% to hit $22,230 and tin

declined 2.5% to $25,945.

($1 = 6.6970 Chinese yuan renminbi)

(Reporting by Eric Onstad; Additional reporting by Brijesh

Patel in Bengaluru; Editing by David Clarke)