Copper prices endured their worst weekly decline in a year on growing fears of a global
economic recession.
The price of copper dropped 7.9% last week (July 11 to 15) and, at one point, was trading below
$7,000 U.S. a ton for the first time since the global pandemic began in March 2020. Copper
prices are now down 33% from a record high set four months ago.
Analysts say the price of copper is being pressured by concerns that Europe will fall into a
recession and China will continue to enact lockdowns as part of its zero COVID-19 policy,
hurting worldwide demand.
Mining giant Rio Tinto Group (RIO) added to those concerns, warning last week that a demand
slowdown in China is “considerable” and saying that pressure on global supply chains needs to
ease before inflation declines.
Copper’s price rose 0.3% to settle at $7,190.50 U.S. on the London Metal Exchange last Friday
(July 15). Investment bank Goldman Sachs (GS) recently forecast that copper’s price will fall to
$6,700 U.S. in the next three months, a 22% downgrade from its previous forecast.
Goldman Sachs warned that rising costs are making copper mining around the world, including
in Canada, unprofitable. Capacity that was profitable at $6,270 U.S. a ton in 2021 now won’t
make money at $7,500 U.S., according to the investment bank.
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