As we explained in great detail yesterday, the selling in commodities is far from over. The extent of China’s commodity-backed-financing is only now beginning to be understood and forced sales (along with the vicious circle of collapsing collateral values and increasingly tightening credit) are hard to stop for a government set of reform. Copper prices were heavy overnight in Asia but this morning has seen futures plunge on heavy volume below $289 – the lowest since July 2009– breaking key support levels. For the same reasoning, zinc and aluminum are under pressure, as is steel rebar and gold.
Which has dropped copper prices to 5-year lows…(breaking critical support)