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Commodity prices just hit their lowest level of the 21st century.
The Bloomberg Commodity Index, which tracks the movement of 22 raw materials and their underlying futures contracts, tumbled 1.5% to 86.96 points this morning (Monday). The index hasn’t sunk that low since Aug. 26, 1999, when it hit 86.30.
Here’s how the index has trended from 1999 to now:
“Sentiment is extremely negative across the commodity complex,” noted Mark Keenan, head of commodities research for Asia at Societe Generale SA in Singapore, in an e-mail toBloomberg. “Markets are plagued by concerns of oversupply.”
All commodity prices retreated today as investors panic over slowing demand in China. The world’s second-largest economy and leading consumer of energy, grains, and metals saw the benchmark Shanghai Composite Index plummet 8.5% on the day. That’s China’s worst single-day stock market loss since 2007.
The current commodity price crash marks the first significant slump since the peak of the 2008 financial crisis. The commodity index fell nearly 60% during the last half of 2008. Prices have slowly been declining since they hit a post-recession peak in early 2011.
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Read the rest of the post [CHART] How Today’s Crash in Commodity Prices Compares to 1999 on Money Morning. Reposted with permission.