Commodities sold off for another session Thursday, with copper leading prices lower with a standout fall of its own.
Aluminium, oil, rural products like wheat, gold all fell again on Thursday amid continuing fears of a global recession.
Those fears were stoked by mid-month business surveys released at the start of the session, which showed clear signs of slowing levels of activity.
Comex copper futures prices in the US dropped again Thursday, losing more than 5% to be down more than12% so far in June.
The Comex price settled just over $US3.74 a pound after touching a low of just over $US3.72 a pound.
That was nearly 20 cents lower on the day and was one of the largest falls for more than 15 months.
Thursday’s close was the lowest since February 2021 and with the prevailing gloom, prices will continue to come under pressure, despite low stocks of the metals and unrest, strikes and other problems impacting mines in Chile and Peru.
The falls already this week (Comex prices are down nearly 9% in the last five sessions at a time when market fundamentals suggest they should have at least steadied – suggest that the price hasn’t found a bottom yet.
Morgan Stanley said on Thursday in a note that the macroeconomic backdrop for industrial metals had deteriorated as central banks’ fight with inflation escalates and China’s zero-covid policy continued to dampen demand for metals.
But the ultra-low stocks in official warehouses (the LME and Shanghai exchanges) and the industrial unrest at Codelco, the world’s biggest copper miner in Chile in particular, should really have helped the metal’s price steady.
Instead it plunged Thursday from around $US3.93 a pound to less than $US3.73 before steadying and edging back over $US3.74 a pound in early Asian trading.
Comex gold and silver prices also fell – gold is now down around $US1,824 an ounce – down 0.78% on the day and near 2% for the past five sessions. Comex sliver slid under $US21 an ounce to be off 2.3% for the day and close to 5% for the past five days.
US oil futures settled at $US104.27 a barrel to be down 1.8% for the day and Brent settled at just over $US110 a barrel, down 1.5%.
US crude is off more than 11% in the past five sessions, Brent, 10.8% thanks to those fears about an economic slowdown.
The slide in copper saw Rio Tinto shares lose 3% in offshore trading Thursday BHP, 1.3% and US copper groups, Freeport – more than 5% and Southern Copper, over 7%.
Locally OZ Minerals fell 5.2% on Thursday and will go lower today, as will a host of other copper plays.
The unease in the commodity markets had little impact on the wider Wall Street action.
A more upbeat tone – especially late in Thursday’s session, saw the Dow end 194.23 points higher or 0.64%, to 30,677.36.
The S&P 500 added 0.95% to 3,795.73 and the Nasdaq finish 1.62% higher to 11,232.19.
It was another example of a relief rally after the vicious selling type week before.
Meanwhile the nervousness about copper continues to rattle lithium stocks, despite continuing evidence (and proof from groups such as Benchmark Mineral Intelligence and brokers, Cannacord Genuity) that Goldman Sachs’ gloom on prices was misplaced.
Pilbara Minerals Thursday announced another record price for its spodumene concentrate at auction, an outcome that was all but ignored.
The auction revealed a price of $US7,017 a tonne (SC 6% CIF China basis).
That’s up around $US500 from a month ago and while not the big rises of earlier in the year, confirms demand remains solid for the metal.
That didn’t do the Pilbara share price any good – it closed down nearly half a cent at $2.05 to be down more than 29% in the past month.
Pilbara’s new CEO, Dale Henderson came out swinging in a statement with the auction results, saying:
“Contrary to recent suggestions that the market has peaked, the evidence we are seeing at the coal-face with our customers, including this pricing outcome, suggests that the demand remains incredibly strong.”