LONDON – It’s been a tough year for copper bulls.
One of the industrial metals most associated with the boom years in China has been hit hard by the country’s lurch away from its previous fixed-asset investment growth model.
Talk of the “new normal” and of a Chinese “slowdown” doesn’t capture the severity of the demand shock experienced by all the metals, copper included.
On the London Metal Exchange the price of three-month copper peaked at $6,481 per tonne in early May, since when it’s ground steadily lower to a current $4,550.
The best that can be said is that copper hasn’t fared as badly as other metals such as nickel, which is back at the bombed-out levels seen at the worst of the global financial crisis.
Copper is some way off its 2008 trough below $3,000, although that may only encourage more bear attacks, particularly in China, where shorting metals has become the hot trade for expressing a negative view on the country’s economic prospects.
The demand “slowdown” in China has been exacerbated by a supply surge. Again this is not unique to copper. Producers of just about every metallic commodity were still chasing China’s “old normal” of rapid infrastructure-fueled growth even as that model was unraveling.
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