A small Chinese solar firm last week missed an interest payment to investors, the first default of its kind for China, signaling a new willingness by Beijing to allow companies to fail as Beijing works to reform the world’s second biggest economy, CNN reported.
More defaults are expected to follow, and while experts say this will ultimately be healthy for China, it’s causing some market turmoil in the short term. Copper prices are tumbling on fears China’s slowing economy could push more companies into default and flood markets with the metal used to finance their debt.
The cash price of primary copper saw a 3.3 percent drop on the LME on Thursday landing at $6,497 per metric ton and making it the biggest mover of the day. The copper 3-month price fell to a 30-day low at $6,470 per metric ton after shifting 3.3 percent.
The cash price of primary Japanese copper declined 2.8 percent. The price of US copper producer grade 122 weakened by 0.3 percent. The price of US copper producer grade 110 fell 0.3 percent. The price of US copper producer grade 102 saw a 0.3 percent decline as well.
Chinese copper closed mixed on Thursday. Chinese copper wire saw its price drop 2.8 percent to a 30-day low on Thursday. Following a two-day drop, the price of Chinese copper bar increased by 0.9 percent. The Chinese copper cash price rose 0.9 percent after a two-day drop. The price of Chinese bright copper scrap saw essentially no change for the fifth day in a row.