Copper Continues to Bleed; Prices Approach 5-Year Low

Copper bombed in 2014. If you invest in the red metal, this is hardly news. Worse, 2015 may not be much better. Copper prices dropped to 2009 levels earlier this week, falling on oversupply factors, and the Bloomberg Commodity Index slid to its lowest in 12 years. reported:

 “The fall in the price of the two raw materials [copper and oil] which are central to the global economy, is being interpreted as leading indicators of slower growth this year. More evidence on Tuesday of a deepening economic slowdown in China, the world’s top consumer of the red metal, added to negative sentiment.”

The price drop has caught some investors by surprise, since economic growth generally boosts industrial metals like copper due to increased demand for the metal in technology and electronics. However, a surplus of copper may be one factor suppressing prices.

But the news isn’t all bad for copper investors, as Stefan Ioannou of Haywood Securities told Copper Investing News:

“With prices not high enough to spark new development in the copper space, the tables will have to turn eventually. Until then, it appears to be a waiting game for the copper price to improve.”