Copper prices have fallen another 2% in value, after hedge funds joined in the sell-off which has seen the metal wrenched back from 15-year highs.
After peaking on Monday, copper has lost 13% in value after speculative fears of falling demand in China and the US sparked panic selling.
Other metals followed suit and mining stocks such as BHP Billiton and Anglo American saw their shares fall sharply.
Strong oil prices were also behind the metals market’s correction.
A gathering of metals dealers for a London Metal Exchange dinner was also blamed for the volatility, with price movements exaggerated by low volumes of trading.
Another factor behind the latest sell-off was programme based trading accounts, which trade automatically when a commodity or stock reaches a certain price.
But other commentators said it was all just a simple correction.
“The market was overcooked, it was all very precarious and once the cracks started to appear, it didn’t take much,” said one metals trader told the Reuters news agency.
Painful move
Meanwhile, market analysts shrugged off speculation that China’s economic bubble was about to burst, threatening its hunger for copper.
China consumes about a fifth of the world’s supply of the metal and is expected to continue to do so.
“The castration of the bulls has been painful,” said analyst Nick Moore at ABN-Amro.
“But the resource story has not yet run its course, there are still plenty of reasons to have resource and commodity exposures, just not so much of it.”
Source: BBC News