Copper sank to a six-month low as China reining in growth, the US central bank signposting its intention to reduce stimulus and rising covid-19 cases triggered a major sell-off.
Copper for delivery in September fell 2% from Wednesday’s settlement price, touching a low of $3.9615 per pound (8,715 per tonne) on the Comex market in New York. The metal price has fallen 16% from its recent record high of $4.7620 per pound ($10,476 a tonne) in May.
Mining stocks also slid, with BHP Group down more than 18% from the previous week, Freeport-McMoRan down 16%, and Glencore down 12%.
“China’s government is determined to slow growth – they have been flagging this since March — we have a virus that won’t go away, and Fed officials expecting to reduce bond buying are hurting commodities,” said Liberum analyst Tom Price.
According to the minutes of the Federal Reserve’s July meeting, officials largely expect to reduce their monthly bond buying later this year.
This has boosted the US currency, which when it rises makes dollar-priced commodities more expensive for holders of other currencies, which could subdue demand.
A spike in coronavirus cases around the world caused by the Delta variant has also fuelled concerns about growth and demand.
Oil and iron ore also hit multi-month lows.
“The overall environment was fragile, to begin with, so I think the Fed minutes yesterday just added another layer of fragility to that,” said Howie Lee, an economist at Oversea-Chinese Banking Corp.
“It's just broad risk aversion across markets.”
(With files from Reuters and Bloomberg)