Copper prices sank below $6,500 a tonne to a near four-year low yesterday as fears mounted over the Chinese market.
In frenetic afternoon trading, prices tumbled more than 2.5 per cent to a low of $6,470. Since Thursday, copper for three month delivery on the London Metal Exchange has tumbled by nearly $600, or 8.9 per cent.
The fall was sparked by China’s first corporate bond default on Friday. Copper has become an increasingly popular source of collateral for Chinese traders, who can obtain dollar loans and profit from interest rate arbritage. As a result, copper imports have rocketed recently, with much of the stock put into warehouses rather than into factories.
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