16 Aug Copper price sinks to 13-month low signalling global economic slowdown
The price of copper fell to its lowest level in over a year on Wednesday, instigating fears of a potential global economic slowdown.
Copper futures for September tumbled to US$5,622 a tonne in New York and entered a bear market in falling more than 20% from a four-year high reached little over two months ago.
Commodities analysts proposed a combination of factors for the alarming price drop in the bellwether metal, including slower growth in China and a stronger US dollar.
“People are seeing weaker data in China, and trade wars are hurting demand. It’s also dollar strength weighing on commodities as well,” said Ryan McKay, commodities analyst at TD Securities.
Copper is often considered a leading indicator for future economic trends due to its application in a number of different sectors, including construction, consumer products and manufacturing.
In addition, hopes for a rapid recovery in the copper price were dashed by the news that a planned strike at Chile’s Escondida mine was close to being averted. Escondida is the world’s largest copper mine and produces 5% of global supply.