BBC World News looks at what has happened in the past week with the price of copper, and what is expected in the second quarter.
It’s called Doctor Copper because you are meant to be able to tell the health of the global economy from the way it behaves.
And at the moment copper is looking pretty sick.
The price of the metal has fallen for two weeks in a row, and reached $6,376.25 a tonne, a low last touched in June 2010.
Analysts are blaming the decline, in part, on signs of weakness in the Chinese economy.
On Thursday of last week the latest batch of numbers out of Beijing showed industrial production grew at its slowest pace for more than four years during January and February.
Meanwhile, retail sales and investment were way lower than expected.
So demand has shrunk, and copper prices have been hit.
But it’s not just the Chinese slowdown that has caused the plunge in the price of copper – Chinese businesses have been using the commodity as collateral for their loans.
So with the first ever bond default in China, commodity investors are worried there may be a glut of the metal coming on to the market.
Exactly how much copper is being held for collateral is uncertain.
Yet there are warehouses in Shanghai that are simply stuffed with copper. Bonded copper stocks in China are estimated to be at about 725,000 tonnes.
And in recent months imports have been accelerating.
The country imported a record 536,000 tonnes in January, up 53% year-on-year – the February figure was a little lower, but that’s still a great deal of copper at a time when the economy is gearing down.
No one is certain about how much of this is being used for finance, but estimates vary between 40% and 50%.
So when solar-equipment maker Chaori Solar defaulted on its loans, questions started to be asked about what would happen to all that collateral if too many other companies defaulted on any copper-backed loans.
The answer is there would be awful lot of people wanting to sell copper.
Then just to make people more nervous, another Chinese solar energy company, Baoding Tianwei Baobian Electric, saw its bonds suspended on the Shanghai exchange.
It has had two years of losses now, and looks a short step away from default.
On Thursday Chinese Premier Li Keqiang talked about “unavoidable” defaults that lie ahead.
The era of easy state-backed credit is coming to an end, lenders are worried, and copper is paying the price.
Andrew Latto, senior analyst at research group Fat Prophets, says: “The copper price is dictated by China, it has 40% of the copper market.
“And if they are determined to take these steps to allow the market to dictate the level of credit, then there is more scope for a downside, and that’s what the market is worried about.”
Gayle Berry, director of base metals research at Barclays agrees, but says the markets were overreacting.
“It is something the markets are very scared of,” she says, “but they don’t really understand the complexities of the way trade is carried out.”
She explained that financing takes place in two ways.
Copper is imported using a letter of credit, and then sold straight on to provide access to cash often for investment into real estate.
The second method involves the selling of copper for a fixed period for cash.
She says that the Chaori bond default has little to do with this sort of financing.
She insists that the stockpiles of copper do have an eventual industrial destination – and that is what will determine the price.
“We think prices will improve in the second quarter, which is the traditional time for a pick-up in copper consumption,” she says.
“The government has signaled major increases in infrastructure work on the power grid – to increase its size by 10% – and that will provide a huge market for the stocks in Shanghai.”