Copper wallowed in bear-market territory again Friday, as prices fell driven by increasing worries that a weaker global economic growth would lead supplies of the red metal to surpass demand.
Copper for delivery in three months fell Friday 1.4% to $6,990 a metric ton by the close on the London Metal Exchange today. The fall, which was below the $6,992 mark, represents a 20% decline from the February 2012 closing high, a common definition of a bear market.
May deliveries were down 2.1% at $3.1370 a pound in late morning trade on the Comex division of the New York Mercantile Exchange. The front-month April contract was down 1.8% at $3.1480.
This is the third time copper dipped into bear-market territory this week, although futures settled above the threshold on Wednesday and Thursday.
Copper prices have been under pressure this year, shedding about 13% so far, and the International Monetary Fund’s move on Tuesday to lower its global growth forecasts, only made it worse.
Experts, however, say the heavy short selling may dry up and spur a strong rebound.
“I don’t think we’ll stay below $7,000 for too long… The data shows that the market has never been this short. That for me is a big upside risk for prices because when people start closing out those shorts, you could get quite a big snap higher,” Barclays’ analyst Gayle Berry told Business Recorder.
Prices have lost almost 7% so far this week.