If China ever begins tearing down the tens of millions of apartments that are sitting empty the amount of supply from copper that will be recycled is mind boggling. Barring that, the huge cutback in residential construction has taken one of the largest demand factors out of the equation and except for the run-up in price we saw immediately after Russia invaded Ukraine, when it appeared China was converting their foreign exchange holdings into just about any kind of tangible stuff that would be storable, grains, metals etc., the trend since the Shanghai lockdowns became widely publicized has been pretty much unidirectional:
CME Copper futures via TradingView
From Mining.com, May 12 (before the late day mini-bounce):
Copper price hits 8-month low on slowdown fears
Copper prices tumbled on Thursday to their lowest in 8 months as traders worried that a slowing global economy would require less metal.
With inflation surging and interest rates rising, growth fears also pushed down oil prices and stock markets hit a one-and-a-half-year low.
The dollar, meanwhile, reached a new 20-year high against a basket of major rivals, making dollar-priced metals costlier for buyers with other currencies.
The yuan fell to its weakest against the dollar since September 2020, making metals costlier in China....
....MUCH MORE
July futures 4.1025 last
Speaking of the yuan, here's the onshore CNY (we use it because it is the one the central bank steers around. The offshore CNH follows at a respectful distance with greater volatility as non-Chinese, not being wired in to the bank and the Politburo, wonder if their last trade makes them geniuses or if they have made a horrible career-ending mistake. Daily.
The banks swears they have no intention of devaluing the yuan and have been doing so since we posted April 11's "The Chinese Yuan is Flirting With a Breakdown" at 6.3660:
From TradingView (up is weaker i.e. more Yuan to buy a dollar), April 11:
If it breaks through the current level (big if, it is the Bank of China that picks the level) a very fast 5% weakening, from 6.37 to 6.68 would be the target with a medium-term goal of 7.0 - 7.1.
Which was followed by April 24's Currencies: "Oh My God, They Killed CNY! You Bastards" and May 8's "Chinese Yuan Continues To Weaken".
Here's the latest from TradingView - again, up is weaker i.e. more yuan required to buy a buck:
6.7941 last, but not a deval.
Bringing to mind Warren Buffett's line:
"He lied like a finance minister on the eve of a devaluation"
