Due to commodities crashing and lower demand, copper is following suit.
Copper is trading at 2.4820 as the metal slides 12.2% since 5 January and records 7.2% losses on Wednesday’s trading, falling from 2.6093 to lows of 2.4208.
Low energy costs and lower consumption in the world’s markets, in particular in China where growth is being slowed and less copper bought. On Tuesday data from China reported imports of copper dropped 7.6% in 2014 due partly to a slowdown in the housing market. A strong dollar and tighter credit are also being blamed for the plummet in commodities.
The factor of surplus appears in the copper decline as with oil, with inventories of copper as monitored by major exchanges in London, New York and Shanghai, climbing 4.5% since the start of 2015, up 29% since June, when supplies were at the lowest in more than five years.
Similarly, the factor of demand effects copper as a key barometer of the metal’s value. With the World Bank cutting global growth forecast from 3.4% to 3% for 2015 and from 3.5% to 3.3% in 2016, copper suffers on the back of lower demand from industry and housing markets as a whole.
The effect on the large mining companies is also clear:
BHP Billiton is down from 23696.50 at close of trade Tuesday to 22313.50 lows on Wednesday;
Rio Tinto is down from 2918.25 at close of trade Tuesday to 2750.25 lows on Wednesday;
Glencore is down from 269.30 at close of trade Tuesday to 243.45 lows on Wednesday.
MT4 chart: Copper
MT4 chart: Billiton
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