Metal prices fall over recession concerns
The price of precious metals, most notably copper, is on the downhill slide right now, and experts are saying it’s just going to get worse.
If you’re wondering why you care about the price of copper, consider all the different things you use that have copper in them – your phone, car, TV, laptop, etc. And that’s not to mention all the industrial applications, including everything from car manufacturing to pasta making.
Back before Russia invaded Ukraine, copper hovered between US$4.40 and US$4.60 per pound. But once the invasion started, that price shot up to around US$4.90, mainly because Russia is one of the world’s biggest suppliers of the metal, and the supply shrank when no one would buy from the country. As inflation has skyrocketed, though, and demand for the metal has fallen, the price is now around US$3.74 and falling fast.
Optimists out there are saying this is just a sign that copper is catching up with the way lots of other commodities are responding to things like inflation or the war in Ukraine. Some, however, say that falling prices could be another sign of an impending recession.
“Copper prices are just starting to account for the fact that global growth is slowing," said Daniel Ghali, director of commodity strategy at TD Securities, to CNN. “Once that stockpiling impulse ended, then global commodity demand started to reconnect with global growth."
“Having enjoyed a mini-boom from consumers returning after the relaxation of pandemic restrictions, many services firms are now seeing households increasingly struggle with the rising cost of living, with producers of non-essential goods seeing a similar drop in orders," said Chris Williamson, a chief business economist at S&P Global. “Business confidence is now at a level which would typically herald an economic downturn, adding to the risk of recession."