Copper’s Rout Deepens As China’s Inflation Decelerates – by Tatyana Shumsky (Wall Street Journal – November 10, 2015)

Decline in copper prices is reverberating across the global mining sector

Copper prices extended their six-year low on Tuesday after Chinese inflation decelerated, stoking investor concerns about demand from the world’s top copper buyer.

China’s consumer-price index, a measure of inflation, rose 1.3% in October from a year earlier, less than the 1.4% gain economists predicted and a slowdown from September’s 1.6% increase. The lack of price pressure suggests that demand and overall economic activity continue to lose steam in the world’s no. 2 economy.

“The Chinese economy is in a slowdown and it needs more stimulus to start movement that would utilize all the copper they already have,” said Ira Epstein, a broker with Linn & Associates in Chicago. “If they don’t stimulate, you’re going to get another leg lower to $2.10 copper and it’s going to create a lot of pain.”

China drives about 40% of the world’s copper demand, but investors worry the country’s metal purchases will decline as its economic growth sputters.

The industrial metal is widely used in construction and manufacturing, two sectors of China’s economy where activity has been slowing. Some traders fear that as China cuts back its copper purchases, demand from other countries won’t pick up the slack, leading to a substantial supply surplus.

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