Copper on July 6 plunged below $7,500 a ton, as increasing fears of a global recession hit the industrial metals market, lowering prices from its record highs a months ago.
Article cross-posted from our premium news partners at The Epoch Times.
The price of copper has dropped by 7.1 percent week over week, according to a Twitter post from Hedgeye, an online investment research and financial media company.
Copper fell by as much as 4.9 percent to $7,291.50 a ton on the London Metal Exchange (LMEX)—its lowest level since November 2020 after recovering to $7,552 a ton by 12:43 p.m. BST.
The mineral had already been hit by a 4.2 percent slump yesterday going below $8,000 a ton, reaching its lowest close in 19 months.
Meanwhile, aluminum lost 0.7 percent in value, while nickel was down 2.2 percent, and lead climbed 1.9 percent.
This is major turn from March, when the LMEX Index of six strategic metals rose to an all-time high after the Russian invasion of Ukraine sparked fears of global fuel and commodities shortages.
This last quarter witnessed the worse results for metals since the 2008 Great Recession, with the current month bringing little relief, as the risk of a recession dominates market sentiment.
Investors are worried over shake ups in the supply chain, such as the Russian sanctions-induced fuel crisis in Europe, a faltering American economy, and severe central government-induced lockdowns in Mainland China.
Companies hoped that China would be a major source for demand for commodities, after the CCP had promised to restart growth in the second half of 2022.
Meanwhile in America, there are also increasing concerns over the Federal Reserve’s aggressive and delayed interest rate policy, which may instigate a severe and sustained downturn, while trying to tame rising inflation.
The central bank’s attempt to curb demand is already beginning to curb U.S. economic growth.
The meeting minutes from the Federal Reserve’s last FOMC conference on June 14 came out this morning, suggesting another 50 or 75 basis point move in July.
“In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives,” the minutes stated.
“In particular, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.”
“Participants recognized that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2 percent as critical to achieving maximum employment on a sustained basis,” the board members admitted.
Analysts are now shifting their focus from inflation to whether and when a U.S. recession will hit, with the chances of an economic contraction now standing at 38 percent, according to Bloomberg Economics.
Falling commodity prices are a key sign that there will likely be a recession in the United States this year, according to Joe Terranova, chief market strategist at Virtus Investment Partners to CNBC on July 5.
He believes that a recession is likely to happen this year, rather than in early 2023, as others have suggested.
“It’s obvious to us that the recession conversation shouldn’t be about one in 2023,” Terranova said. “It should be about one in 2022—if we’re not already in one right now.”
Investors should keep an eye on oil, copper, lumber, agriculture, and soft commodity prices, he said, noting that they are a potential harbinger of recession, as a major drop would signal deflationary pricing.
Before every recession in the past three decades, falling copper prices have been a sign of a pending economic crisis.
“The calendar has turned into July, and the market isn’t pricing based on inflation, it’s pricing based on an expected recession,” Terranova said.
Oil prices fell in June, after topping $120 a barrel in March and April, with Brent crude dropping 13 percent at $104 a barrel today, while West Texas International crude fell 16 percent to hover just over $100 a barrel.
Lumber futures have been down at least 27 percent over the last three months, as rising housing costs and mortgage rates curb demand for building materials.
If rising inflation continues and an economic downturn hits, demand will take a severe fall.
Analysts anticipate investors rushing to the U.S. dollar as a safe haven during the period of market instability, adding further pressure.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
