prices of copper. The shares of coppers miners dipped low in the morning trade and future prices of the copper saw a major upheaval wherein tumbled down to a 5 year low. Wednesday drop is incidentally the sixth consecutive decline the copper prices and currently the copper are trading at $5,560 per ton. The sudden and steep decline in prices is causing a significant pain to major mining companies like FCX, Glencore and others whose stocks has taken a beat down by recording a massive low.
The Major Copper Producers Take A Hit
Freeport McMoRan Inc known as FCX which is the largest copper producer listed on stock exchange saw a massive decline of 9.5%. Freeport shares are now at trading at $19.05 which is its lowest registered price since April 2009. Even the other suppliers of the metals shared the same fate and fell considerably low. Glencore Plc (GLEN) which is the third largest producer saw a drop of 12% in London while the First Quantum Minerals fell by 27% in Toronto.
A Kazakhstan copper producer Kaz Minerals Plc (KAZ) also registered a fall by 23% in London while Vedanta Resources Plc (VED) which a giant producer of copper in Indian and Zambia fell by 20% followed by Antofagasta Plc (ANTO) registered a drop of 13%.
Drop In Copper Prices Raises Concern
Investors are keeping a keen interest in the fate of the copper prices which doesn’t seem to have any silver lining for the moment. This precious metal is characteristically referred as ‘Dr. Copper’ due to wide spread usage in various industries. Copper is the recent entrant in the club of commodities market which had registered a sharp plunge in its rates globally after the fall in the prices of the oil. Just like the oil, copper tend to have deep impact upon the world economy as it is key element for the phone lines, cables and other infrastructures. The world largest copper producers are in order of their production ability are Chile, Chiba, Peru, US and Australia.
The sudden and deliberate fall in copper price is a major concern and it is seen as a domino effect rising due to considerable rout in oil prices. It is now spreading to other commodities which include copper as well. This is also perplexing and points towards the imminent slowdown in global economy which is deeper than thought and certainly it wouldn’t be limited to energy market.
World Bank Shows A Slow Global Economic Forecast
Owing to the steep drop in prices of various commodities the World Bank has cut down its global economic growth forecast to just 3% from the 3.4%. The data of Wednesday even pointed out that the December retail sales had declined much more than expected earlier. The price fall in crude oil had made investors quite uneasy about holding on to the energy stocks and their shedding of those would inevitably lead to more losses in various commodities which includes coppers as well.