And now copper is getting crushed.
In overnight trading in New York, the price of copper was down about 6% to below $US2.50 a pound, a more than four year low for the commodity.
The crash in copper prices is the latest in a global commodities sell off, which has been highlighted by the decline in the price of oil, which is down more than 50% since June.
In a note to clients, commodities analysts at Morgan Stanley in Australia attributed the overnight — or intraday move for trading in New York — drop in copper prices to “speculation that cheaper energy costs will encourage mining companies to increase production.”
A report from Bloomberg late Tuesday said that a reduced growth forecast from the World Bank was pressuring the commodity. Bloomberg reported that in London, prices fell 8.7% while copper trading in Shanghai hit its daily trading limit.
But no matter the specific cause behind Tuesday night’s crash in copper prices, there is broad weakness in commodities worldwide.
In a presentation on Tuesday, DoubleLine’s Jeff Gundlach highlighted the following chart, showing the broad weakness in the commodity complex over the last year.
Over the last few weeks, oil has made its way down to five-year lows, and it seems that copper is now following.
In its report on Tuesday night’s leg lower in copper prices, Bloomberg highlighted comments from analyst David Lennox in Sydney who said, “The news everywhere is doom and gloom. Prices are going to keep sinking.”
Here’s the multi-year chart of copper, which has been in a clear multi-year downtrend since the commodity bubble popped in 2011, but this is a nasty last leg lower.