Copper, the price of which is the indicator of the forecasts of economic-industrial performance, given its wide uses, has literally plummeted today. It now touches around $ 3.6 per Pound in futures contracts, but it was also below this value throughout the day.
This level has not been seen since February 2021, and it is getting closer and closer to pre-covid levels, while fears of a recession that would compromise demand continue to weigh on the market. However, news that China eased Covid-19 restrictions in Shanghai and eased test mandates raised the prospects for increased demand. In addition, the industrial data showed an improvement in the activity of factories in China. Caixin's Chinese manufacturing PMI stood at 51.7 in June 2022, returning to growth after three months of contraction. On the production front, workers at the world's largest copper producer, Codelco, Chile, have reached an agreement with the company to end the national strike. This means that there will be no restrictions on production, but if demand does not rise, the price will drop.
However, the non-positive moment is indicated by other metals such as silver, iron and even platinum, the latter closely linked to the automotive sector. All of these metals point to substantial losses, with platinum losing 14% in a month and 19% since the beginning of the year.
In the meantime, the ISM manufacturing index, i.e. the index that evaluates the mood of purchasing workers in the US manufacturing sector, has dropped by three points
This means that the US manufacturing sector does not expect any significant growth, indeed a relatively hard time, if not a real recession.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/dottor-copper-il-rame-precipita-e-indica-recessione-profonda-lindice-manifatturiero-usa-conferma/ on Fri, 01 Jul 2022 15:45:41 +0000.