Copper prices collapsed Tuesday night, and you can go ahead and blame that on weak demand from the world’s largest consumer of the commodity, China.
In the chart below, courtesy of Bank of America, you can see that China’s stockpiles of copper have fallen substantially over the past year, and it is clear based on copper’s price that the country isn’t buying more to restock.
The Chinese economy is going through a massive slowdown as the government tries to transition from an investment-based economy to a consumption-based economy. That means less building and infrastructure development in general.
In this case, that probably also means Chinese copper demand isn’t coming back anytime soon.