METALS-Copper slides to 6-year low on China growth angst
Source: CNBC
Copper prices hit six-year lows on Monday as manufacturing data from top consumer China and a slide in Shanghai equities reinforced concern about economic growth prospects. <snip> "There hasn't been any stabilization of Chinese stocks, despite all the efforts by the government." July manufacturing activity in China fell at its fastest pace in two years, dashing hopes the economy may be stabilizing.
"
Chinese) manufacturing remains in a severe slump, meaning that base metals should remain on the defensive," INTL FCStone said in a note.
"Moreover we see no meaningful reduction in base metals supply with aluminum output up over the last year. While Chilean copper production will also exceed 2014 levels."
Read more: http://www.cnbc.com/2015/08/03/reuters-america-metals-copper-slides-to-6-year-low-on-china-growth-angst.html
A good article on the real message of plunging commodities (linked below)
The Chinese stock market recently saw its biggest selloff in eight years as the dramatic 8.5-percent fall in Shanghai "A" shares also rattled markets around the world. <snip> We see the Bloomberg Commodities index now at a 13-year low. Copper is down 28 percent for the year, tin is down 30 percent, and nickel is down 44 percent. And then we have gold. Last week, China dumped four tons on the market, causing the price of the precious metal to fall almost 4 percent within a matter of seconds. This had little to do with the value of the dollar on the DXY, but it was rather mostly about the waning demand in China from its imploding economy and the need to sell what you can when capital controls are in place.
But here is the most important take: The arrogance that led the Fed to believe it could save the world in 2008 by manipulating markets is causing Ms. Yellen and Co. to promulgate the idea that it can now raise rates into a global slowdown without negative repercussions. The truth is that the Fed hasn't raised interest rates in a decade and will probably never be able to move much off the zero-bound range without totally collapsing markets and the economy. I think the Fed is aware of this and that's why it is continually finding excuses not to start a rate-hiking cycle.
http://www.cnbc.com/2015/08/03/the-real-message-of-plunging-commodities-commentary.html
