Copper futures are slumping on Tuesday as China’s Evergrande debt crisis has given the red metal market the jitters. Copper prices have experienced a correction since hitting a peak of $4.88, although they are still up by double digits in 2021. Is the bull run over for the industrial metal? With some key producers lowering their price forecasts, it could be a struggle for copper to stay above $4.

October copper futures tumbled $0.0505, or 1.23%, to $4.064 per pound at 13:55 GMT on Tuesday on the New York Mercantile Exchange. Copper is down 7% over the last week, but it is up more than 15% year-to-date.

Global financial markets are rebounding on Tuesday, but copper prices are still taking a hit on the intensifying debt crisis at the property giant China Evergrande Group, which could create a disastrous situation for the world’s second-largest economy and biggest copper consumer.

Evergrande is poised to fail to make an interest payment and a large principal payment this week. The indebted real estate developer’s $300 billion in liabilities could ripple across the international marketplace. This is most worrisome for copper prices because it is a chief component for housing construction. If the economy sputters or China’s real estate sector takes a steep hit, it would likely send copper prices lower.

In other industry news, according to the International Copper Study Group, the global world refined copper market posted a 90,000-ton deficit in June, compared to the 4,000-ton surplus in May. However, with China’s state planner, the National Development and Reform Commission (NDRC), anticipated to release copper, aluminum, and zinc from its state reserves, the sector would witness a surplus and ease prices.

Beijing plans to release 420,000 tons in three batches through public auctions this year.

Meanwhile, Chile’s copper commission Cochilco revised down its average copper price forecast to $4.20 per pound, down from $4.30 a pound. Moreover, its market trends report predicts prices will average $3.95 next year as the market faces a surplus of 190,000 tons.

In other metal commodities, November gold futures picked up $11.70, or 0.66%, to $1,775.50 per ounce. October silver futures tacked on $0.301, or 1.36%, to $22.505 an ounce. October platinum futures surged $40.30, or 4.48%, to $939.50 per ounce. December palladium futures added $31.80, or 1.7%, to $1,897.00 an ounce.