Benchmark copper on the London Metal Exchange (LME) was down 0.8% at $7,982 a tonne at 1602 GMT. Prices of the metal used in power and construction earlier fell to $7,918, the lowest since February 2021.
LONDON: Copper prices fell to 17-month lows on Monday as new COVID restrictions in top consumer China, slowing global manufacturing activity and a jump in inventories sparked demand worries and a sell-off.
Benchmark copper on the London Metal Exchange (LME) was down 0.8% at $7,982 a tonne at 1602 GMT. Prices of the metal used in power and construction earlier fell to $7,918, the lowest since February 2021.
"China's manufacturers have had an awful time. People are fearful of inflation and recession, but the probability of recession is less than 50%," said Dan Smith, managing director at Commodity Market Analytics.
"The market needs to find a floor, but industrial metals are starting to look like good value."
COVID: Cities in eastern China tightened COVID-19 curbs on Sunday as coronavirus clusters emerged, posing a new threat to the country's economic recovery under the government's strict zero-COVID policy. Read full story
ACTIVITY: Global manufacturing struggled in June as higher prices and a darker economic outlook left consumers wary of making purchases, while Russia's invasion of Ukraine added to supply chain disruptions, surveys showed. INVENTORIES: Copper stocks
INFLATION: Hitting economic activity is soaring inflation and interest rate rises in many countries including the United States where the Federal Reserve is expected to deliver another 75-basis-point rate hike this month
POSITIONING: Marex Analytics estimates that short copper positions - bets on lower prices - are as large as they were in 2015 when economic growth in China slowed to a 25-year low.
At close of business June 30, the copper short was 1.5 million or 43.6% of open interest compared to the peak of 3.1 million tonnes and 72.2% in 2015 and up from about 1 million tonnes and 29.8% on June 23, Marex said.
OTHER METALS: Aluminium
