Copper Price stays pressured near February 2021 levels as recession fears mount

• Copper remains on the back foot around 17-month low, keeps Friday’s bearish bias amid lackluster Asian session.
• US holiday restricts market moves but fresh covid, geopolitical tensions join economic slowdown fears to keep sellers hopeful.
• Chile’s efforts to increase royalties and reform tax system for copper producers appear probing the bears as well.

Copper Price stays on the bear’s radar around the lowest levels in 1.5 years as economic slowdown fears weigh on the industrial metal during Monday’s Asian session.

That said, the red metal prices as the three-month future contract on the London Metal Exchange (LME) dribble around $8,040, after hitting the lowest since February 2021 the previous day at $7,955. Further, the most-traded August copper contract in Shanghai fell more than 2.0% to 61,250 yuan a tonne by the press time.

It’s worth noting that the recent activity numbers suggest that PMIs from the US to Eurozone, economics revisit the levels last seen during the initial wave of the pandemic. Considering this, the ANZ Bank said, “Surveyed data from both PMIs and the US ISM are all pointing to faltering orders growth, lower backlogs of work indices and softer production over the summer. It is hard to escape the growing growth pessimism, which is also fanning expectations of a peak in both inflation and central bank hawkishness.”

It should be noted that Russia’s claim of having complete control over Lysychansk and news suggesting an increase in covid cases in China’s Anhui province exerts additional downside pressure on the metal prices.

On the contrary, news that Chile, the world’s largest copper producer, is up for changing the tax and royalty system for copper producers seems to have put a floor under the prices. However, an increase in production and higher stocks appear to keep the metal prices under pressure.

Looking forward, the US Independence Day holiday restricts the market’s immediate moves but this week’s Federal Open Market Committee (FOMC) Minutes and the US Jobs report for June appear crucial for short-term directions.