Metals Set to Face the Worst Quarter Since the 2008 Financial Crisis

Although China is predicted to recover in the second half of the current year, such a recovery may not be adequate to single-handedly push the metal prices up.

SEATTLE (Scrap Monster): The industrial metals are seen staring at their worst quarter since the 2008 financial crisis.

The metals had had a good run, mainly driven by post-lockdown optimism, fears of inflation and supply shortages. However, despite high inflation and critical supply shortages, the prices have crashed over the recent months. The slowdown in industrial activity across major economies coupled with falling Chinese demand have accelerated the downfall. For instance, copper is said to be trapped in a bear market, falling from its record highs nearly four months back. Also, tin prices have reduced by almost one-fifth in just over a week.

Although China is predicted to recover in the second half of the current year, such a recovery may not be adequate to single-handedly push the metal prices up. Moreover, recession in other major economies will further stem the predicted growth of Chinese markets. It must be noted that there are already signs of decline in Chinese manufacturing activity.

The sharp correction in industrial metal prices started in early-June this year after U.S. Federal Reserve announced its decision to hike interest rates by 75 basis points and warned of a possible recession in its effort to bring inflation under control.

It must be noted that metals have been hit harder than other commodities, being hit the most by recent geopolitical tensions.

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