SMM8, 16 Feb: as a result of the Turkish currency crisis, investors are worried about the spread of concerns about emerging markets and the impact of China's sluggish economic growth and the expansion of the Sino-US trade war. Mining and metals investors sold off big names on metals and mining on Wednesday.
COMEX copper fell below the brin track and all EMA support, hitting a low of $2.55 a pound and entering a bear market, down more than 20 per cent from a nearly four-year high two months ago.
Escondida, the world's largest copper mine, which accounts for nearly 5 per cent of the world's copper supply, avoided a strike. The latest news has limited optimism about a rapid rebound in copper prices.
Financial journalist Els believes nickel, which is currently trading at $13135 a tonne, is likely to be the only bullish metal in 2018, thanks mainly to strong demand for electric car batteries to boost demand for nickel.
Zinc is by far the most worrying of the base metals, with losses of nearly 30% in 2018 after falling again on Wednesday.
"the price volatility of copper and other basic metals appears to be dominated by financial markets," the BMO Capital Markets report said. But we also need to focus on the prices of commodities (such as chromium, vanadium, tungsten, steel) set in the spot market in order to securely reflect potential market demand for metals, which may be more comprehensive.
The weakness in the metals market spread to mining stocks, causing the industry to lose money across the board. Shares in BHP Billiton, the world's largest miner, fell 4.8 per cent in new York, although news that the Escondida copper mine had avoided a strike could provide some support for the stock in the coming days. Rio Tinto, which holds a minority stake in Escondida copper, fell 3.3 per cent. Glencore, the world's third-largest copper producer, fell 6 per cent and Vale of Brazil fell 5 per cent.
Overall, copper producers were the hardest hit, with Antofagasta down nearly 13 per cent on the New York Stock Exchange, China's Mo industry down 12 per cent and Katz Mining (KAZ Minerals), a Central Asian producer, down more than 10 per cent.
(Freeport McMoRan) shares of Freeport McMoran, the world's largest copper producer, also fell 7.7 per cent.
Gold hit a one-and-a-half-year low of $1182 an ounce on Wednesday, and the strategy of investing in gold as a safe haven has failed. Silver fell to $14.38 an ounce, meaning it has fallen more than 15 per cent so far this year. Platinum hit a 14-year low of $769.20 an ounce amid serious scepticism about its long-term prospects. Palladium, the best-performing metal in 2017, has also fallen 22 per cent this year.
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