This quarter, base metals prices slumped the worst since the 2008 global financial crisis. At the end of March, the LME index price had fallen by 23%. Among them, tin had the worst performance, falling by 38%, aluminum prices fell by about one-third, and copper prices fell by about one-fifth. This was the first time since Covid-19 that all metals prices have fallen during the quarter.

China’s epidemic control was eased in June; however, industrial activity progressed rather slowly, and a weak investment market continued to reduce metal demand. China still has the risk of escalating control at any time once the number of confirmed cases rises again.

Japan’s industrial production index plunged by 7.2% in May due to the knock-on effects of China’s lockdown. The supply chain problems have slashed demand from the auto industry, pushing metal inventories at major ports to an unexpectedly high level.

At the same time, the threat of a recession in the US and global economies continues to plague the market. Federal Reserve Chairman Jerome Powell and other central bankers warned at the European Central Bank’s annual meeting in Portugal that the world is shifting to a high-inflation regime. Major economies headed for an economic slowdown that could dampen construction activity.