(Updates throughout, changes dateline to LONDON)
By Peter Hobson
LONDON, June 23 (Reuters) - Copper prices fell to a 16-month low on Thursday as fast-rising interest rates and weak economic data fanned fears of a global slowdown that would reduce demand for metals.
Prices are down more than 20% from a record high of $10,845 in March.
"We are seeing a broad-based cyclical sell-off," said WisdomTree analyst Nitesh Shah. "It's not just copper, not just industrial metals, it's equities markets, too."
Shah said that aggressive increases to interest rates could push copper even lower but he expects prices to be significantly higher in five years because of rising demand for the metal as the world transitions from fossil fuels to electrification.
Copper is used in wiring to transmit electricity.
INTEREST RATES: Central banks are raising interest rates sharply to rein in soaring inflation, which in turn will restrain economic growth.
U.S. Federal Reserve chair Jerome Powell on Wednesday said he is committed to bringing inflation under control even at the risk of an economic downturn.
GLOBAL ECONOMY: Manufacturing growth is slowing from Asia to Europe while the growing risk of a recession in the United States poses a new threat to the global economy.
MARKETS: Global equities and oil prices fell. [MKTS/GLOB] [O/R]
CHINA: Mainland China reported 135 new coronavirus cases for June 22, up from 126 new cases a day earlier. COVID restrictions in China have reduced metals demand.
ZINC: Available zinc inventories in LME-registered
warehouses have shrunk by two thirds this week to the lowest in
at least 24 years.
In a sign of tight supply, the premium for quickly delivered
cash zinc over the three-month contract shot to a three-year
high of $160 a tonne.
Benchmark LME zinc
OTHER METALS: LME aluminium
(Reporting by Peter Hobson Additional reporting by Brijesh Patel Editing by David Goodman) ((Peter.firstname.lastname@example.org)) (( For related news and prices, click on the codes in brackets: LME price overview
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