The value of copper on global trading exchanges headed steeply downward in June. Analysts are citing stifled economic activity in China combined with fears of a recession in developed nations as raising concerns on the demand side for the red metal.
Copper closed on the United States-based Comex exchange at $3.64 per pound June 30, while on the London Metal Exchange (LME) it ended that day with a cash bid price of $8,240 per metric ton, or $3.74 per pound.
The red metal started the month at $9,450 on the LME ($4.29 per pound). The month of June, therefore, saw a 12.8 percent drop in the value of copper as measured by that exchange.
A news item posted by Reuters June 30 indicates the value of copper on the LME fell by more than 19 percent in the second quarter of this year.
That same article points to several factors contributing to a lack of confidence in the metal’s future, including the prolonged COVID-19-related lockdown in Shanghai and other parts of China and the onset of potential recessions in other parts of the world, caused in part by rampant inflation.
While China’s commodity woes might be felt most keenly on the Shanghai Futures Exchange (SHFE), the nation’s partial hibernation helped cause Japan’s factory output in May to post the biggest monthly drop in two years, Reuters says.
Another factor has been the increasingly strong U.S. dollar, which the news service says “makes dollar-denominated metals less attractive for buyers holding other currencies.”
The lower price has not seemed to stall copper recycling investments in the United States, with German companies Aurubis and Wieland both moving forward with significant recycling capacity investments.
On the processing and trading side, in its quarter ending May 31, Portland-based Schnitzer Steel Industries Inc. says,“Nonferrous sales volumes were up 29 percent year over year, benefiting from strong global demand and an easing of supply chain and logistics disruptions.”