Metals, especially copper, experienced plummeting prices Monday as the world reacted to Greece’s no vote on whether or not to accept more austerity measures from the European Union. The Organization for Economic Cooperation and Development (OECD) also came no closer to phasing out coal subsidies for member nations.
Greek Debt Crisis Hurts Metals, Other Commodities
Most commodity prices suffered on Monday after Greece rejected terms for a bailout and top consumer China unleashed emergency measures over the weekend to prevent a full-blown stock market crash.
“The thing to watch is the Euro/Dollar exchange rate. If the dollar starts going up as a result of what happened, that would exacerbate an already bearish commodities and metals markets,” said MetalMiner Executive Editor and Co-Founder Lisa Reisman.
Brent crude fell below $60 per barrel on Monday, to levels last seen in April. Chinese steel prices are now at their lowest since the peak of the global financial crisis in 2009, with futures down 70% to around 2,000 CNY per metric ton.
“A lot of bad news out of China will be very bearish as well and we don’t yet know how much of that crisis has been factored into the current market,” Reisman added.
Three-month copper on the London Metal Exchange hit its weakest since mid-March at $5,640 a mt, down by 2%.
“The longer term question of Greece is also one that goes unanswered – what is the long term health of the European Union? That could have a long term impact but not a short term one,” Resisman said.
OECD No Closer to Ending Coal Subsidies
A decision on phasing out a form of coal subsidy is unlikely to come soon but discussions among members of the Organization for Economic Cooperation and Development continue ahead of UN climate talks, the OECD’s secretary-general said on Friday.The OECD has been trying for a year to get an agreement from its 34 member nations on ending export credits for technology used to produce coal, the most polluting of the fossil fuels.