This article was originally published on ETFTrends.com.
The new coronavirus from China is hampering an array of industrial commodities, copper chief among them. The United States Copper Index Fund (CPER) and the iPath Series B Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) are off to dreadful starts in 2020 due to the “Wuhan virus.”
However, dueling views of the industrial metal remain in place. Some analysts are growing concerned that global troubles could drag down the industrial metal as well. Along with the trade concerns, copper prices were weakening on softening global economic data. The base metal is a significant component in many industries, including construction, and is widely seen as a barometer for global economic health.
Unfortunately for copper bulls, some analysts believe the bearish case for the red metal is increasing.
“An economic slowdown in China following the spread of the new coronavirus, and the potential loss of demand for copper, pulled prices for the industrial metal to its lowest in almost three years. Some analysts say the worst may be yet to come,” reports Myra Saefong for Barron's.
Some analysts are growing concerned that global troubles could drag down the industrial metal as well. Along with the trade concerns, copper prices were weakening on softening global economic data. The base metal is a significant component in many industries, including construction, and is widely seen as a barometer for global economic health.
“Copper has taken a significant hit so far this year. On Feb. 3, copper futures logged a 13th straight session decline, the longest such streak on record, based on data going back to November 1984, according to Dow Jones Market Data. Prices settled that day at $2.507 a pound, the lowest since May 2017. Copper futures settled at $2.593 a pound on Feb. 6,” according to Barron's.
If China's economic growth slows as a result of the coronavirus, as some expect it will, copper prices could suffer further erosion.
Some investors believe “that China’s economy was showing signs of a slowdown even before the virus, pointing to the latest industrial profit figures. Chinese industrial-company profits dropped by 6.3% year on year in December, following growth of 5.4% in November,” reports Barron's.
For more information on the commodities market, visit our commodity ETFs category.
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