Morgan Stanley said a US recession could hurt demand for base metals and could lead to a glut of commodities such as copper.
Morgan Stanley has already cut its forecast for metals demand growth this year from 2.5 per cent to 0 per cent because of a sharp slowdown in Europe and the US, but a US recession could put further pressure on demand.
The US now accounts for only 7 per cent of global copper demand, compared with 30 per cent in the 1960s.
But even so, if US copper demand falls by 5 per cent this year, that would mean an increase of 140,000 tonnes to 230,000 tonnes of copper surplus.
However, stronger demand from Asia should mitigate the impact of the lack of US demand and keep overall global copper demand positive.
