Global recession fears wreak havoc on industrial metals, but industry better poised for long downturn, strategists say – by Nial McGee (Globe and Mail – June 27, 2022)

Fears over a pending global recession are causing carnage in the industrial metals market, but the sector is better prepared than in the past to withstand a prolonged downturn, strategists at Morgan Stanley say.

Nickel, tin, zinc, and metallurgical coal and copper all tumbled last week and are trading far from their peaks. Copper is down 25 per cent from its all-time high of US$5.02 a pound reached in March. Tin has lost 44 per cent of its value in the same timeframe to trade at US$26,985 a ton.

The shares of Canada’s biggest base metals miners, including Teck Resources Ltd., Ivanhoe Mines Ltd., First Quantum Minerals Ltd., Lundin Mining Corp., and HudBay Minerals Inc., have also gotten crushed over the past few weeks.

TD Securities Inc.’s commodities strategists wrote in a note on Friday that an “imminent slowdown” in global growth is exacerbating the meltdown in the metals markets. “The outlook for growth remains severely challenged by a co-ordinated effort from central banks to tame inflation,” TD wrote.

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