Chinese commodity and stock exchange markets reopened after almost 2 weeks break
Value of copper, iron ore, steal and palm oil increasingly dropped. Heating coal is the only exception.
Most of major commodities traded in Shanghai and Ta-lien sunk by their daily allowable limit or approached its line during Monday. Copper, oil, iron ore or steel dropped in 7-8% in average, including futures contracts. Such a progress was expected as commodity exchanges were closed for almost two weeks. The original Lunar New Year break was later prolonged due to coronavirus epidemic.
Virus spread is the main reason why Chinese commodity exchanges significantly dropped. Ta-lien and Shanghai markets basically followed the same pattern as all world’s commodity exchanges. They all face coronavirus fear and step up measures to protect important sectors of national economies. Chinese economy is currently most vulnerable. Due to fear of stock market slowdown, drop in demand for key raw materials is expected, and that leads to price decline. We may predict that the weakening trend will still be present until coronavirus epidemic is over.