Commodity retreat claims a new victim as copper sinks to 2009 levels
January 22, 2015- Weekly Pricing Pulse
The IHS Markit Materials Price Index (MPI) dropped another 2.0% last week, led by declines in oil, chemical, lumber, and nonferrous markets.
The weak fundamentals that have sunk iron ore, rubber, and crude oil prices to 2009 lows extended into copper markets last week, with one added strategic twist. Beginning after dinner in New York and in London's twilight hours, copper prices plunged on Wednesday, falling 4.9% to well below $6,000/metric ton. Chinese hedge funds had been reducing long positions in the metal, with the onslaught well timed to take advantage of relative illiquidity during Asian trading hours.
The real surprise for the week came from the Swiss National Bank (SNB), an unlikely candidate for market ripples. By removing its euro peg—in place since 2011—the SNB did just that, with the franc appreciating markedly, and the euro falling to an 11-year low against the dollar. In the week ahead, markets will be focused on some key Chinese data and the European Central Bank's fine print on further easing to be announced.
Pricing and Purchasing – Supply Management
Global Pricing Summary - Week of 22 January 2015
Key Prices & Demand Drivers