Jamie Chisholm is the FT's global markets commentator
To maintain financial health one should always listen to the doctor: Dr. Copper, that is.
The red metal is so named because it’s considered most erudite in its forecasting of global economic activity.
Copper is not immune to daily risk on/off switches but its fundamentals demand respect, argue its disciples. If true, global equity investors should be nervous.
The Shanghai copper future was limit down - a fall of 6 per cent to a 16-month low - on Thursday. The stumble is a function of demand concerns rather than a reflection of supply increases.
Freeport-McMoRan, the biggest quoted copper producer, this week cut its sales forecast for next year.
A slower pace of Chinese growth is meeting worries over the economic health of the US and euro zone. Funding difficulties in China as Beijing seeks to restrict speculation are also weighing and this has contributed to the Shanghai Composite index falling to a 31-month trough.
Some western investors tend to be pretty sniffy of the SCI, but a drop to March 2009 levels should not be so quickly dismissed.
Note, the U.S.-traded copper contract has not matched the equity market’s bounce of the past few weeks.