Copper Prices are Likely to Remain Subdued During Q4 of 2022 as the Weakening Global Growth Outlook Weighs In

On London Metal Exchange, the prices of copper fell 0.3 percent to USD 7,740 per tonne, and on the Shanghai Futures Exchange, the cost valuation for the most traded contract of copper increased 0.4 percent to USD 8,842.45 (Yuan 62,280) per tonne.

As per market experts, 37,000 tonnes deficit in the copper market this year 2022 and a 286,000 tonnes surplus in the year 2023, as opposed to the 82,000 tonnes surplus predicted in the October poll for 2022. The copper miners predicted that the supply of copper would outpace the demand and weaker outlooks until 2024.

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The output of copper supply is very slow as expected at the start of the year due to the ongoing political tensions between top copper-producing countries such as Chile and Peru. The world’s largest copper mine Escondida was down by 6.4 percent in the first five months of the year 2022, according to the International Copper Study Group.

The tight monetary policies are leading to combat because of the rising inflation which is harming the GDP and the demand for metals. Copper Prices are often considered the indicator of economic health globally, the prices declined by 28 percent in March 2022. Fitch Solutions revised its copper price projection for 2022 from USD 9,470 per tonne to USD 8,800 per tonne.

The prices of copper are expected to remain high by historical standards, averaging over USD 7,500 per tonne during 2022 due to the ongoing supply problems in Latin America. The price of tin increased by 0.3 percent to USD 25,090.52 (Yuan 176,710) per tonne whereas the cost valuation of aluminum declined by 1.1 percent to USD 2,656.58 (Yuan 18,710) a tonne

China’s aluminum imports fell to 200,440 tonnes in August, with a 19 percent decrease as compared to the previous year due to the decreased appetite and limited global supplies for the metal

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As per market experts, inflation will potentially be a bullish trigger for the prices and financial markets of copper. Whereas Russia will remain a key swing factor and significant headwind for copper.

According to procurement resource, due to the deteriorating prognosis for global growth, copper prices are projected to remain restrained in the fourth quarter of 2022. The cost valuation for the most actively traded copper contract jumped 0.4 percent to USD 8,842.45 (Yuan 62,280) per tonne on the Shanghai Futures Exchange while copper prices decreased 0.3 percent to USD 7,740 per tonne on the London Metal Exchange.

Due to growing inflation, the GDP and metals demands are affected, and the tight monetary policies are causing conflict. Copper prices, which are frequently used as a gauge of global economic health, fell by 28% in March 2022. As per the market experts, the financial scenarios and supply of copper will affect the market more due to the rising prices in the coming month.