Copper and iron ore prices slip on dismal global economic prospects

Prices for key industrial commodities copper and iron ore both slipped yesterday against a backdrop of stalling demand in China and fears of a global economic slowdown and an impending recession.

The copper price fell by 1% to a fresh 17-month low of US$7,847 per tonne on Monday, following news of as renewed lockdowns in China and the prospects of aggressive interest rate hikes in economies around the world.

Known as the bellwether metal for the global economy due to its various industrial and manufacturing inputs, copper sank to its lowest level since February 2021 on the Comex market in New York.

“Softening demand and concerns over a growth slowdown are dragging on the sector,” analysts from ANZ wrote, before asserting that ‘improving Chinese economic activity will stabilise prices’.

Meanwhile, iron ore prices fell in relation to the gloomy demand outlook in China, where many steel mills are facing losses and cutting production. Benchmark 62% iron ore fines imported into Northern China fell 4.41%, to $109.89 per tonne yesterday.

“We expect iron ore futures will trade lower this week given these overwhelming price negative factors,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.

Key iron ore producing miners, including Vale, Rio Tinto and Fortescue Metals Group, also saw their stock prices fall, with the latter sliding by 6.16% on the previous week.