Copper heads for worst weekly loss in a year, nickel and tin plunge

A vendor shows copper components used for plumbing for sale at the Surtidora Ferretera riverside store in Mexico City, Mexico October 24, 2017. REUTERS/Henry Romero

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LONDON, June 24 (Reuters) – Copper prices were set for their biggest weekly decline in a year on Friday, down around 6.5%, as investors feared central bank efforts to stem the inflation will stifle global economic growth and reduce demand for metals.

Other industrial metals also fell, with nickel losing around 13% this week and tin slipping 22%, its biggest weekly decline since at least 2005.

“There is a risk of further losses,” said independent analyst Robin Bhar. “A marked economic downturn or recession appears to be on the cards.”

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Benchmark copper on the London Metal Exchange was down 0.5% at $8,367 a tonne at 4:05 p.m. GMT after touching $8,122.50, down 25% from a high in March and at the lowest level since February 2021.

Bhar said copper, used in electricity and construction, could drop towards its cost of production, around $7,000 to $7,500, but tight supply and growing demand for electrification later in the decade will drive prices up.

Federal Reserve Chairman Jerome Powell said this week that the U.S. central bank would cut inflation to its 40-year high, even as it drives up unemployment and risks slowing the economy. Read more

Global manufacturing growth is slowing, in part due to coronavirus-related restrictions in China’s top producer. Read more

However, some investors believe that slowing growth and falling commodity prices should reduce inflationary pressures and the need for aggressive interest rate hikes. Read more

Tin prices fell 10.1% on Friday to $24,260 a tonne, down more than 50% from their March peak, after falling earlier to $22,980.

Noting that the market for the metal used in soldering for electronics is smaller and less liquid than for other metals, traders said the selloff had a bigger effect on prices.

LME nickel fell 6.9% to $22,375 a tonne and is trading at its lowest level in five months.

Aluminum fell 0.8% to $2,457 and is down around 2% this week. Zinc slipped 3.9% to $3,354.50 and is down around 5% this week. The lead was down 1.2% at $1,925 and heading for a weekly loss of 7%. Read more

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Reporting by Peter Hobson, additional reporting by Brijesh Patel in Bengaluru; Editing by Paul Simao and Emelia Sithole-Matarise

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