Industrial metals prices on the London Metal Exchange (LME) fell again across the board yesterday on heightened fears of a recession, with Dr. Copper, or LME copper, falling 4.88 per cent to $7615.00 a tonne, the lowest level since November 2020.

Another big drop was tin, which fell 3.77 per cent to $25675 a tonne in LME yesterday.

Most analysts believe that the recent sharp decline in industrial metal prices is mainly due to increased recession fears caused by weak manufacturing PMI data in Europe and the United States, superimposed by the Fed's aggressive interest rate hike process, the global COVID-19 epidemic and the recent increase in LME metal inventories have depressed investor sentiment, with copper and other industrial metals continuing their decline since the end of June.

As the S & P 500 and the Nasdaq move higher, there seems to be a bullish trap. However, for the US and European markets, market bearish forces still dominate because of concerns about the recession. " Said a Singapore metals trader.

Economic activity in many countries, including the US, has been dragged down by soaring inflation and a sharp rise in benchmark interest rates, raising fears of recession and the Fed is expected to raise interest rates by another 75 basis points this month.

According to CME Fed Watch, the probability of the Fed raising interest rates by 50 basis points by July is 16.8%, the probability of raising interest rates by 75 basis points is 83.2%, the probability of raising interest rates by 50 and 75 basis points by September is 0%, the probability of raising interest rates by 100bp is 16.0%, the probability of raising interest rates by 125bp is 79.9%, and the probability of raising interest rates by 150bp is 4.2%.

At the same time, the latest data show that copper inventories in LME-approved warehouses have risen sharply to 136950 tonnes, up more than 20 per cent in the past week, and the pace of inventory consumption has slowed significantly.

Tin in LME has also fallen sharply in recent days, and tin is widely used in consumer electronics, information technology, machinery and aerospace industries. However, pessimistic expectations of a recession and a slowdown in consumer spending have reduced demand for consumer electronics, leading to weak demand for tin.

It is understood that due to the slowdown in consumer electronics demand, Samsung Electronics of South Korea temporarily suspended the acceptance of new orders and asked suppliers to delay parts shipments for several weeks or reduce shipments, mainly because their own inventory has reached a high level.

In addition, according to previous media reports, due to the decline in market demand for PC and the fading of the "mining" boom, AMD and NVIDIA Corp indicated to Taiwan Semiconductor Manufacturing Co Ltd that they had to adjust their order planning. among them, AMD reduced the order from the fourth quarter of this year to the first quarter of 2023, and NVIDIA Corp asked to postpone and reduce the order in the first quarter.