Copper skidded to its lowest since mid-2017 as investors faced fresh evidence of a global slowdown and fading prospects for a de-escalation in the US-China trade war.
Long known as a canary in the coal mine for the economy, copper has slumped 16 per cent since mid-April on the back of a sharp downturn in factory output and warnings that major economies are heading into recession. Prices fell 1.8 per cent to $5,520 a tonne on the London Metal Exchange on Tuesday.
A rallying dollar is also piling pressure on industrial metals, with buyers using other currencies seeing their purchasing power steadily erode as the greenback climbs. China’s onshore yuan hit the lowest since 2008 on Tuesday, spurring losses across the LME’s suite of dollar-priced contracts.
Copper, lead, tin and zinc fell at least 1%.
“The selling has already gone a long way, but we can’t rule out the possibility copper will go lower,” Xiao Fu, head of global commodities strategy at BOCI Global Commodities UK, said by phone from London. “If the macro picture remains weak or we see other negative shocks coming into the picture, we could see further selloffs.”