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
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
* 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
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)