COM - Copper slips to near four-month low on China demand U.S. recession fears

2023-04-27 11:55:24 ET

Copper prices fell to the lowest in nearly four months on Thursday, as investors focused on Chinese data showing profits at industrial companies fell 19% in March, and higher than expected U.S. inflation sparked gains in the U.S. dollar.

The personal consumption expenditures price index, an inflation measure closely followed by the Federal Reserve, rose 4.2%, ahead of the 3.7% estimate, while core PCE, which strips out food and energy, jumped 4.9%, above the previous increase of 4.4%.

Three-month copper ( HG1:COM ) on the London Metal Exchange recently was -0.6% at $8,504/metric ton after hitting its lowest since January 6 at $8,426/ton, and the most-traded June contract on the Shanghai Futures Exchange closed -0.8% to 66,560 yuan/ton ($9,612.66).

ETFs: ( NYSEARCA: COPX ), ( NYSEARCA: CPER ), ( JJCTF ), ( JJC )

Given that copper historically has been a rather reliable proxy of economic growth, continued softening in prices may indicate an increasing likelihood of a U.S.-led global recession.

Separately, Reuters reported Chinese companies that make copper products said they plan to reduce production for Q2 , typically the peak demand season, because of a slower than expected consumption recovery after COVID-19 and sluggish exports.

More on Southern Copper:

• Southern Copper's Q1 production up 4% as Cuajone mine ramped up
• See financial and valuation comparisons to sector peers
• SA analysis: Freeport McMoRan ( FCX ) and Southern Copper ( SCCO ): One has a Fatter Profit Margin

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