Jan 31, 2020 - Economy

Copper is on life support

Data: Investing.com; Chart: Axios Visuals

The price of copper fell for a record 12th straight session on Thursday, falling to its lowest price on the New York Mercantile Exchange since September and its lowest on the London Metal Exchange since October.

Why it matters: Known as Dr. Copper, the metal is seen as a barometer of the economy's health because of its use in homebuilding and commercial construction.

  • Analysts said the continued weakness in copper was a major warning sign for global markets.

The big picture: Prices for copper, crude oil and other commodities are falling based on fear that the coronavirus outbreak will hurt demand from China, the world's top commodities importer.

  • Factories outside of Wuhan have pushed back plans to reopen after the Lunar New Year holiday to Feb. 10.

Yes, but: "Economic activity in China is suffering, though in terms of manufacturing and construction activity we are at a seasonally low point," Julius Baer analyst Carsten Menke told Reuters.

  • "Typically, when we have this sort of short-term shock, there’s catch-up potential for economic activity once the situation normalizes."

Go deeper: Gold has been 2020's star asset

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