Copper, which serves as a barometer for global growth likely to drop further mainly due to its link to China's consumption and weakness in global recovery.

Currency depreciation against Dollar, across emerging markets is going to invariably slowdown in imports, which is unlikely to bear well for global trade and without improvements global trade, there can hardly be any sustained recovery. Moreover, lower commodity prices likely to reduce consumption and imports of global commodity producers such as Brazil, New Zealand, Australia, Russia, and Saudi Arabia. Hence there weakness in economy unlikely to bear well for global growth as well as copper.

However, major strain is coming from China's weakness and shift from Copper to Aluminum, which is domestically produced, where possible.

On the supply side, major cut back in production, unlike. Instead companies are choosing to slash production. High grading is also contributing to supply continuation, which is mining of best quality of metal, which reduces extraction cost significantly.

Under such fundamental, copper is unlikely to do well going ahead.

Trade idea -

Technical setup is suggesting, despite copper falling below $2/pound in comex, bulls are not giving up easily, so price is consolidating. If risk aversion subside in the near term copper might gain to $2.15/pound.

However, medium to long term outlook still bearish and copper might reach $1.84/pound and $1.72/pound in the medium term.

China credit bubble burst could push prices even lower, however as of now we don't see price drop past $1.35/pound in such case.

Copper is currently trading $2/pound.