METAL prices are heading for their worst performance since the 2008 crash, according to Bloomberg News which said recession fears were sitting heavily on commodities.
Copper has fallen into a bear market from a record four months ago, while tin declined 21% in its worst week since a 1980s crisis froze trading for four years, the newswire said.
“Even if China recovers in the second half, it won’t be able to single-handedly boost prices back to new highs — that age has gone,” Amelia Xiao Fu, head of commodities strategy at BOCI Global Commodities, told Bloomberg News. “If other major economies are heading towards a recession, China won’t be growing at exceptional rates either.”
Copper hit a 16-month low of $8,122.50 a ton on the London Metal Exchange on Friday, with an 11% drop so far in June putting it on course for one of the biggest monthly losses of the past 30 years, Bloomberg News said.
Metals from aluminum to zinc have also plunged and the Bloomberg Industrial Metals Spot Subindex is down 26% this quarter, headed for the biggest drop since the end of 2008. Tin has more than halved from its March peak.
For now, the recessionary risks around copper are driving away generalist investors, said BOCI’s Fu. “Some of the so-called tourists have decided they want to get out for the time being, and from a trading perspective that makes sense — but fundamentally these markets are still very tight.”