Copper Spirals to 19-Month Low

Recession Fears Dominate

Copper fell to its lowest price in 19 months, with metals extending losses as global recession fears continue to damp the demand outlook for commodities.

Sentiment remains sour for industrial materials used in everything from construction to new energy vehicles. Copper, widely considered an economic bellwether, is trading well below $8,000 a ton after metals posted their worst quarterly slump since the 2008 financial crisis.

“Sentiment in US industry is becoming more gloomy, in other words; we interpret this as a sign that the US economy is losing momentum,” Commerzbank AG analyst Carsten Fritsch said in a report. “Concerns about a global recession continue to predominate on the metals markets.”

The chances of a US recession are now 38%, according to the latest forecasts from Bloomberg Economics.

https://www.bloomberg.com/

The US economy shrank 1.6% in the first quarter

First quarter of 2022 marked the start of Russia’s invasion of Ukraine

The US economy shrank at a slightly faster rate than previously estimated during the first quarter, the Bureau of Economic Analysis said Wednesday.With one quarter of negative economic growth in the books, the data adds to fears that a recession may be looming. Real gross domestic product declined at an annualized rate of 1.6% from January to March, according to the BEA’s third and final revisions for the quarter.

Previously, the advance estimate released in April showed a contraction of 1.4%. Last month, that was revised to a decrease of 1.5%.

The first quarter GDP performance, which the BEA noted includes some unquantified effects from the pandemic and the Omicron variant surge, stood in contrast to the fourth quarter of 2021, when the economy grew at a rate of 6.9% from the prior quarter.

The first quarter of 2022, however, marked the start of Russia’s invasion of Ukraine, which sent economic shockwaves throughout the global supply chain, as well as the food, finance and energy markets.Domestically, US inflation has soared to levels not seen in decades amid ongoing supply chain challenges, rising costs for commodities and labor and spiking oil prices.

https://edition.cnn.com/

Wall Street rallies on hopes Russia, Ukraine can resolve conflict

Prices eased for oil and other commodities

U.S. stocks rose on Tuesday, with the Dow and S&P notching their fourth straight session of gains, on optimism some progress was being made toward a deal to resolve the conflict between Russia and Ukraine.

Russia pledged to cut down on military operations around Kyiv and in northern Ukraine, while Ukraine proposed adopting a neutral status, the first sign of progress toward peace in weeks.

Prices eased for oil and other commodities, helping calm concerns about rising inflation and the path of monetary policy by the Federal Reserve, which has started hiking interest rates to combat rising prices.

https://www.reuters.com/

Energy Prices Rose 59% In 2021

Economic recovery from the Covid-19 pandemic

Energy prices at the end of 2021 were 59% higher than they were at the beginning of the year, according to a new report by the Energy Information Administration (EIA).

The boom in energy prices—which was more than the gains seen by other commodities—was largely the result of economic recovery from the Covid-19 pandemic. Most other commodity prices in the S&P Goldman Sachs Commodity Index (GSCI) saw about a  20% increase, with the exception of precious metals, which saw a decline.

Within the energy portion of the commodity index that tracks the performance of global commodities markets, RBOB (wholesale gasoline) saw the largest gain at 67%, followed by heating oil, then WTI and Brent. Gasoil and natural gas rounded out the energy segment of the GSCI.

https://oilprice.com/