Stock market index
While everyone has focused on Greece, the falling Chinese stock market might be the bigger threat to commodities. Also, a major US rare earths producer has been granted interim funding.
Chinese Stock Market Dragging Down Commodities
China’s falling stock market is injecting more stress into a global commodity sector already reeling from the Greek debt crisis. Prices of copper, coal, natural gas and iron ore are all falling toward their 2015 lows.
The Chinese economy is growing at its slowest pace in a generation. The country’s ongoing stock market turmoil – which has seen a 30% plunge in the benchmark CSI300 index since mid-June – is threatening to pull the entire commodity complex into the red. Stronger performers such as oil and solar are now being dragged down by the lack of Chinese demand, as well.
Molycorp, US Bankruptcy Court Agree on Interim Financing
Molycorp, Inc., a producer of rare earth products, recently received approval from US Bankruptcy Court on $22 million in interim debtor-in-possession (DIP) financing provided by an affiliate of Oaktree Capital Management. The new funds will support operations going forward for an interim period while Molycorp continues to negotiate with Oaktree and a group representing its secured 10% noteholders, both of which represent secured creditors that have presented competing DIP lending proposals.