No Bottom for Copper, Iron Ore

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Two of the world’s most heavily traded commodities, copper and iron ore, have plunged to 5½-year lows this past week as China’s weakening growth, global deflation and the stronger US dollar have intensified a selloff that began last year.

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“It’s a perfect storm of negative factors,” said Robin Bhar, London-based head of metals research at Société Générale SA .

Both copper and iron ore suffered during 2014 as investors shied away from commodities, but their slide has deepened this year. Along with oil, both are among the world’s worst-performing assets so far in 2015.

On Thursday, January 29, the cash price of Japanese copper fell by 3.5%, landing at JPY 670,000 ($5,697) per metric ton and making it the day’s biggest mover. Just off of a 30-day low of $3.24 per pound, the price of US copper producer grade 110 rose 0.6% on Thursday. The price of US copper producer grade 122 rose 0.6% yesterday, just off the 30-day low of $3.24 per pound it hit on Tuesday, January 27. After hitting a 30-day low of $3.43 per pound on Tuesday, January 27, the price of US copper producer grade 102 rose 0.6% yesterday.

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Chinese copper closed mixed yesterday. The price of Chinese copper wire rose 0.2% yesterday, just off the 30-day low of CNY 40,160 ($6,431) per metric ton it hit on Tuesday, January 27. After falling 0.1% to CNY 40,950 ($6,557) per metric ton, the price of Chinese copper bar reached a 30-day low. The Chinese copper cash price reached a 30-day low after decreasing 0.1% to CNY 41,150 ($6,589) per metric ton. After a couple of days of decreasing prices, the price of Chinese bright copper scrap held steady at CNY 33,600 ($5,380).

The cash price of primary copper fell to a 30-day low at $5,485 per metric ton after shifting 1.3%. Also on the LME, the copper 3-month price declined 1.2% to $5,455 per metric ton.

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