Wednesday, March 12, 2014

China's Copper Ripples

The drop in copper prices yesterday was a good demonstration of how much impact the Chinese economy can have on the rest of the world. A new report showed that China's exports had declined last month by 18 percent, amid wider concerns about the slowing of China's growth.

China is the world's largest importer of copper, and the immediate impact was that copper futures fell, declining by 3 percent to reach their lowest level since July 2010. But copper stocks fell as well. Freeport McMoRan Copper & Gold, a Phoenix-based precious metals company, dropped more than 2 percent on the day.

Driven by the commodities slump and concurrent drops in oil prices, the S&P 500 also slid backward from the record high it had set last week. China is only the second-largest economy in the world, still far behind that of the U.S., but its impact is not to be underestimated.


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