On the supply side, emerging market producers have been trying to ramp up production to capitalize on the stronger dollar.

“As you devalue currencies in emerging markets, many of which are natural resource producers, they are going to try and ramp output as they get paid in dollars for commodities,” Doug King, manager of Merchant Commodity Fund, told the Financial Times. “So the currency moves both add more commodities supply while also raising a big question mark over demand.”

According to the Bloomberg Industrial Metals Index, industrial metals prices plunged 19% from its peak in April, closing in on a bear market. Copper prices recently hit its lowest level since July 2017.

Access to capital has also dried up in China, fueling concerns over future demand for raw materials. John Browning, managing director of Hong Kong futures broker Bands Financial, told FT that corporate clients he speaks to are finding access to credit difficult and are “having a tough time”, and contributed to the heavy selling of copper futures.

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