Prices of many commodities hit multi-year lows this week as a rout in China’s equity markets fueled worries about underlying problems in the world’s second largest economy.
Copper, a key industrial metal, reached a six-year low as its price dropped to around US$2.45 a pound, the Wall Street Journal noted.
Iron ore, a steelmaking ingredient, fell to US$44.10 per metric ton this week, marking the weakest level in more than 10 years. Meanwhile, aluminum prices have slumped 10 percent since the beginning of the year.
Crude-oil prices, which recovered earlier this year after a crash in the second half of 2014, also resumed their slide, the report noted.
China’s stock market crash also pressured prices for US agricultural commodities including soybeans, which on Tuesday tumbled more than 3 percent to the lowest level in more than a week.
As China is the world’s largest consumer of many commodities, any slowdown in demand from the country will drag down the prospects of energy and metals firms.
“China’s infallibility and omnipotence” as a guaranteed buyer have been “pierced”, Dan Rohr, an analyst for Morningstar, told the Journal.
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