Copper price at 16-month low as fears of slowdown hit industrial metals market

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Morgan Stanley said the macro backdrop for the industrial metals sector had deteriorated as central banks’ fight against inflation intensified and China’s zero covid policy continued to dampen demand for the metals.

“Recession fears have increased,” said WisdomTree analyst Nitesh Shah.

“We are seeing a cyclical sell-off. It’s not just copper, not just industrial metals, it’s also stock markets.

Shah said aggressive interest rate increases could push copper even lower, but he expects prices to be significantly higher in five years due to growing demand for the metal as the world shift from fossil fuels to electrification.

US Federal Reserve Chairman Jerome Powell said on Wednesday he was determined to get inflation under control even at the risk of an economic slowdown.

“The [US Federal Reserve] tightens aggressively. Holding copper is expensive. The commodities world’s flagship is under fire,” said Liberum analyst Tom Price.

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(With files from Reuters)

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