Chinese commodity prices collapsed on the first day of trading after the Lunar New Year break as investors returned to markets gripped by fear over the impact the coronavirus will have on demand in the world’s biggest consumer of raw materials.
The country’s three major commodity exchanges were hit by a fevered bout of selling as they reopened with Chinese traders getting their first opportunity to catch up with losses inflicted on overseas markets while they had been on holiday.
Metals, energy and agriculture futures were all hammered, with iron ore, crude, copper and palm oil contracts all sinking by their daily allowable limit within seconds of markets opening. Shares in commodity also producers tumbled as stock markets resumed trading. By the 3 p.m. close of trading, iron-ore was 6.6% lower at 606.50 yuan a ton, the weakest since November. Steel reinforcement bar closed down 7.6% after opening at its downside limit. Domestic oil futures saw the biggest decline since their debut in March 2018 while copper dropped 6.2% and palm oil by 6.9%. Markets won’t reopen until Tuesday morning after China canceled overnight trading.