Copper price fell below $8,000 a tonne on Wednesday for the first time since November as prospects for a quick rebound in China’s economy recede.

Copper for delivery in July was down 2.74% on the Comex market in New York, touching $3.55 per pound ($7,810 per tonne). 

The metal has tumbled about 7% this month in the face of disappointing economic data from the world’s top consumer. All the gains following the end of China’s Covid-19 lockdowns have been wiped out. Poor domestic demand has forced smelters in China to ramp up exports that have helped replenish inventories elsewhere.

“May is seasonally a slow month for industrial metals demand. Copper demand looks weak, orders from wire rod plants are poor,” said Dan Smith, head of research at Amalgamated Metal Trading.

“We are also seeing a pick-up in supplies,”

“Metals markets have faced significant pressures after the disappointing April macro data from China, which have acted as a wake-up call to the weak reality on the ground,” Citigroup Inc. said a note. 

On Monday, Goldman Sachs Group said its forecasts for major rises in raw materials this year hadn’t panned out well so far.

“Prices continue to move against our forecasts,” the analysts said in the May 23 report, pinning the probable explanation for their miss on an unprecedented clear-out of stockpiles and positioning. “What is the explanation? It is likely the largest commodity destocking the complex has ever witnessed.”

Against that backdrop, Goldman analysts expect commodities to come roaring back should recession concerns prove to be misplaced. “The absence of a recession would likely lead to higher oil and commodity prices as well as higher rates, to which equities would likely react poorly,” they said. 

“For people buying into a structural long-term story, the way to play that is to buy an equity, not an option,” said Dwight Anderson, the founder of Ospraie Management LLC.

Copper will return to $10,000 a tonne by this time next year, analysts including Goldman Sachs Nicholas Snowdon said in a note.

Supply is rising as some challenges faced by key miners have eased. First Quantum Minerals Ltd. ended a months-long dispute with the Panamanian government in March. A massive hoard of copper in the Democratic Republic of Congo owned by China’s CMOC Group Ltd. is set to hit the market after being held up by a dispute over royalties.

Copper production in Peru jumped in March as large mines resumed operations after stoppages caused by social protests.

That would mean “prices are going to head even lower,” said Jiang Hang, head of trading at Yonggang Resources Co.  

The supply strength is already showing in a rebound in LME inventories from the multi-year lows of the first quarter.