Copper price hits new six-year low as Paris attacks continue to take their toll

 
Sarah Spickernell
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The attacks have reduced global appetite for risky investments like commodities
The attacks have reduced global appetite for risky investments like commodities (Source: Getty)

The price of copper has plunged to a new six-year low, as investors continue to shy away from the risky commodity in light of the Paris attacks.

On Tuesday morning, it dropped to below $4,600 per tonne on the London Metal Exchange for the first time since 2009. This followed on from a huge sell-off on the Shanghai Futures Exchange, which sent the metal down 3.5 per cent in value.

Read more: Glencore chief executive Ivan Glasenberg tells rivals to close failing mines to help rally copper price

It is the second day of declines for the metal, which closed 2.8 per cent lower at $4,690 on Monday. The nervousness spread by the attacks that left at least 129 people dead in the French capital has sent investors running from assets with risk associated with them, such as commodities.

But the attacks are not the only cause of copper's decline – since Since May 2015, it has lost around 25 per cent of its value, due to the increasing strength of the US dollar and diminishing demand in China.

“Essentially we have a copper market that is oversupplied at a time when there is weakening demand, primarily because of China. China is key on the demand side, accounting for almost half of world demand, so any changes in the economy in China does have a big impact on copper market," Robin Bhar, metals analyst at Societe Generale.

So sentiment was pretty gloomy prior to the attacks, and Paris has exacerbated the already bearish sentiment. Equities seem to have recovered, but the metal markets haven't yet.

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