Metals Set for Worst Quarter Since 2008 on Global Downturn Angst

Base metals headed for the worst quarterly slump since the 2008 global financial crisis as China’s economy recovered only gradually and fears of a world recession intensified.

The London Metal Exchange Index has tumbled 23% since the end of March, although the decline has been magnified due to prices spiking that month following Russia’s invasion of Ukraine. Tin has been the worst performer, plummeting 38%, while aluminum is down by around a third and copper has fallen by about a fifth. It will be the first quarterly decline for the entire index since the start of the pandemic.

A gauge of Chinese factory activity expanded in June for the first time since February, as virus controls were eased. The improvement was fairly muted, however, and a weak property market continues to weigh on metals demand. The Covid Zero policy also remains intact, despite a relaxation of quarantine rules, meaning there’s a constant risk of more restrictions if case numbers pick up again.