Copper sank below $6 000, while the dollar climbed and stocks fell, as investors fret that the Turkish crisis will spill over into emerging markets, hurting demand already threatened by a US-China trade war. Other metals, crude oil and gold declined too.
The price of copper fell 1.9% to $5 928 a metric ton, the lowest since July last year, as BHP Billiton and the main union at its giant mine in Chile looked set to avoid a crippling strike in government-mediated talks. Zinc lost 2.2% to the weakest since 2016, while oil and gold slid 0.5%.
Commodities have been battered by worsening trade tensions between the world’s two largest economies, concern the row will hurt growth in China, the top consumer of raw materials, and by rising US interest rates that have strengthened the dollar and pulled money out of emerging markets. The Bloomberg Commodity Index has lost 9% from a recent peak in May.
Gold, normally seen as a haven in times of turmoil, fell 0.6% on Wednesday to $1 186.58 an ounce, the lowest since January last year, while platinum plunged to the weakest in almost a decade.
A wave of selling hit Chinese markets as the yuan slumped to the lowest against the dollar in more than a year. Shanghai copper futures lost 2.6%, while zinc dropped 2.4% and nickel slid 2.2%.
“If the current macro cues remain unchanged, then the next leg lower is only a matter of time with Europe likely to see another wave of systematic selling once they open,” broker Marex Spectron said in a note. “The path of least resistance remains lower for now.”