“In my opinion, commodities have not bottomed yet,” said Andrew Hecht, chief market strategist at Carden Capital. “The markets are suffering from a couple of things: big inventories, lower demand from China — which is very much the demand side of the equation for commodities — and a stronger dollar.
China is exporting its excess supply of products like aluminum because of lower demand at home.
“As the main consumer of commodities and the main source of commodity growth over the past decade, the China slowdown has had a disproportionate impact,” said Craig Pirrong, a finance professor at the University of Houston. And he said markets can’t tell just how long that slowdown will last.
“China’s a tremendous source of uncertainty and volatility, and Alcoa’s going to be along for that ride,” said Pirrong.
The company is trying to hold on, closing plants and dividing its operations to respond to slowing global growth.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.