Copper is getting smashed.
Overnight copper was at its lowest level since 2009 with the price of three-month delivery falling 2.6% overnight to settle at $5,860 a metric tonne or $2.66 a pound on the London Metal Exchange. It reached $5,774.75, the lowest since August 2009.
But this afternoon it smashed through technical levels falling to $5476 a tonne not long ago. It dropped more than 8.5% and went as low as $2.434 a pound today.
IG Markets strategist Evan Lucas said while some were putting the crash down to the World Bank downgrading growth, that was old news. He said it looked like the sell-off is more to do with concerns that have emerged today about China.
“It’s absolutely getting smashed,” he said.
“China’s growth is now being questioned – we’re now six days away from GDP,” he said.
“It broke technical levels this afternoon and it kept going and going and going.
“It’s a bit of trade but also may be the idea that China’s growth is slowing quicker than we thought.”
Copper is a major component of the global economy and plays an important role in emerging countries, including China. It’s often said the commodity is a useful indicator for the state of the economy because of how widespread its uses are in industrial applications, including construction.
Copper ores and concentrates was $5.2 billion worth of Australian exports in 2013/14, making it the 11th biggest export. Copper exports were $3.7 billion, coming in 16th place.
Here’s the chart.