Morningstar, a financial services and analysis firm, has suggested declining copper prices might portend a broader economic slowdown. | Flegere/Shutterstock
Prices for copper have been slipping to lows not seen since the May time frame.
Copper, an important commodity in scrap electronics, was trading through cash contracts for about $3.67 per pound earlier this week, and in late September it sold for around $3.64, according to the London Metal Exchange. The last time it was this low was at the end of May, when it dropped to $3.59 per pound.
In January of this year, the red metal was trading for nearly $4.30 per pound.
Seeking Alpha, which tracks stocks and points out which commodity prices weigh heavily on which companies, noted the price decline comes as “the surging dollar and expectations of further increases in exchange inventories added to concerns about demand for industrial metals.”
Financial services firm Morningstar suggested the declines could serve as a harbinger of an economic slowdown.
“Falling demand is largely a factor of weakness in the Chinese economy, analysts say,” Morningstar reported. “But given that China’s economy is the world’s second largest, the ripple effects could be felt as far away as Europe, the U.S. and beyond.”