China, the globe's top consumer of the base metal, is host to a growing number of companies that hold debt that is twice as big as their equity. One company, Shanghai Chaori Solar Science Energy Science & Technology Co., failed to remit interest payments due on bonds on Friday. The industrial metal is sensitive to worldwide and domestic economic news and developments because of its widespread use in construction, manufacturing and additional industry.
"The recent renminbi depreciation and the Chaori Solar bond default will test the resolve of traders involved in copper financing deals," states a Friday email authored by analyst Aneek Haq with Exane BNP Paribas in London, according to Bloomberg. "The Shanghai arb has closed completely in the past few trading sessions."
At 10:24 a.m. on Friday, copper futures dropped 3.6 percent, a 0.116-cent slide to $3.102 per pound.
Reuters reports copper futures advanced earlier this week in the aftermath of Russian troops' incursion into the Crimea after the prime minister of Ukraine was ousted last month.
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