OREANDA-NEWS In the second quarter of 2022, the fall in base metal prices could be the worst since the global financial crisis in 2008. According to Bloomberg, this might happen due to the slow China's economic recovery, while fears of a recession are growing in the rest of the world.

The index of metals traded on the LME has dropped 23% since the end of March. The severest decline was demonstrated by tin, which fell in price by 38%. The price of aluminum fell by about a third, copper - by 20%.

On Thursday, contracts quotations for zinc fell by 1.3%, for copper and tin - by 0.1%.

Although activity in China's industrial sector increased this month for the first time since February, the improvement was rather sluggish. At the same time, the weak real estate market continues to put pressure on demand for metals. The zero tolerance policy for COVID-19 in the country is still in place, which means the possibility of introducing restrictions and lockdowns at any time in case of an increase in the incidence.

The threat of a recession in the United States and possibly around the world is looming over the market, analysts say. At the European Central Bank's annual forum, Federal Reserve Chairman Jerome Powell and other central bankers warned that the world is moving into a higher inflation regime.

Economic growth is slowing, at least in the largest economies, and this will have a negative impact on the construction industry, which accounts for a significant share of demand for metals, experts say.

The decline in the LME index since the beginning of this year is 12%.