It’s been a brutal two days on the copper market with prices falling nearly 10% since Monday.
Containing the losses to single digits was only thanks to a late recovery in New York on Wednesday.
Earlier in the day the price dropped 8% on the London Metal Exchange while losses in Shanghai could’ve been worse if the daily down limits on the Chinese exchange hadn’t been reached.
Many market observers (including your writer) believe prices won’t stay down at these levels which are the lowest since July 2009 – the height of the financial crisis.
Between them the planet’s top ten producing mines have proven and probable reserves of 42.3 billion tonnes.
Contained metal at these 10 sites amount to 182.2 million tonnes.
Monday’s close at $6,130 a tonne on the LME to Wednesday’s end of day price of $5,548 a tonne (up from a stomach-churning $5,353 earlier) turns into a combined loss (or writedown if you will) of value at the mines of $133.8 billion dollars.
Of course these numbers represent money still buried in the ground, but it’s nevertheless a stark and sobering exercise to calculate just how much damage the red metal rout has done.
And how happenings on faraway futures markets can wreak havoc on (and under) the ground.
Data supplied by IntelligenceMine. IntelligenceMine and MINING.com are owned by Infomine. Image source: Codelco.