Copper Prices Plummet Amid Global Economic Concerns
Copper prices have taken a hit, falling by as much as 1.3% in London after a strong rally earlier this month.
The decline comes as concerns about the global economy resurface, with the US-Iran conflict intensifying and oil prices reaching near five-week highs.
Industrial metals had posted notable gains in August, with copper rising almost 4%, thanks to tight supplies. However, a hawkish speech by Federal Reserve Chair Kevin Warsh last Friday has fueled bets that the Fed will need to hike interest rates to combat inflation, potentially slowing economic growth and crimping industrial commodity demand.
Despite the short-term tightness in LME copper availability, with spot prices trading over US$100 above the benchmark contract for delivery in three months, analysts at Sucden Financial Ltd note that 'prompt pressure is providing less support to the outright price' due to a weaker macro environment.