Commodities have entered the death dive price phase which always is a part of the their life cycle. The downside action is an event that becomes almost comical when observed first hand. Offers (pools) grow during the session on limit down days and traders wait for some sign of intra-day recovery or opportunity for any spread side action. Trading limits are a polite way to avoid total panic. But like someone waiting for there named to be called before they can go through a fire door during an inferno, limits can create even greater anxiety.
What started this sell off was a rally grown old, but oddly enough, the Bear Stearns collapse played a part. You see there is nothing that bothers a commodity trader more than a real event of price deflation. A sudden change in supply/demand can have quick and powerful result in price. When BSC went from 30 to 2 in one trade, that bothered anyone holding any speculative contracts of any kind. A slight nudge from margins or cashing up circles is enough to created a one way highway south.
