For the past year, copper traded like a seesaw on the on-again, off-again hopes of a U.S. and China trade deal. Now it’s more like a rollercoaster ride down.
The focus is increasingly on the damage caused by the havoc of a trade dispute between the world’s two biggest economies. The broad applications for copper mean it’s particularly vulnerable to the synchronized tailspin being seen in everything from car-making and earth-moving equipment to commercial property and advanced electronic components.
“What the hard data is telling us is that end-use demand is slow and in many places getting kicked quite hard,” Oliver Nugent, a metals strategist at Citigroup Inc., said by phone from London. “China’s commodity-intensive economy is as weak as it’s been in recent history.”
On Friday, copper broke through a trading range that’s lasted since July 2018, hitting a new two-year low. With zinc and aluminum also plunging, here are six charts showing the base metals markets’ burgeoning demand crisis.
Manufacturing Maladies
Even with the slide to two-year lows, copper hasn’t kept pace with the sharp decline in global manufacturing over the course of the year, prompting Macquarie analysts to point to further downside for the metal as prices re-tether themselves to demand trends.
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