A brief summer rally in industrial metals prices has sharply reversed as the worsening energy crisis in Europe and signs of a slowdown in manufacturing behemoth China spook traders.

The S&P GSCI index of industrial metals has dropped more than 9 per cent since mid-August, leaving it back near its lows in July when fears of a global recession were swirling across trading desks. The gauge, which tracks the spot price of metals including copper, nickel and aluminium, is down 17 per cent in 2022, having been up more by more than a quarter at its peak in the wake of Russia’s invasion of Ukraine.

The renewed selling in metals that are used to make a wide range of products like car parts, steel and electric wires highlights how concerns about global demand are again coming to the fore as economists worry that a surge in energy prices will weigh heavily on industry.