Lifted in toto from Reuters and Mining.com, November 7:
Copper prices fell on Monday after China reaffirmed its stringent covid-19 restrictions and data reinforced demand worries.
After its best trading day in years on Friday, copper for December retreated by 2.6% in New York to exchange hands for $3.593 per pound ($7,904 a tonne) in midday trade.
“China’s zero-covid policy is not the only problem,” said Julius Baer analyst Carsten Menke. “Removing that policy won’t fix the property market … wiring in buildings and households account for a large proportion of copper demand.”
China’s property market continued its slump in October, with private data showing home prices and sales falling, while trade data showed imports of unwrought copper and copper products fell 1.5% in October from the same period a year ago.
The country’s zero-covid approach and lockdowns have squeezed its manufacturing sector and hit demand for industrial metals.
“Easing lockdowns ahead of winter – as China’s covid infections are rising – seems an irrational bull case for investors,” Liberum analyst Tom Price said in a note.
(With files from Reuters)
Most active futures down 0.0215 (.60%) at 3.5820
Welcome to my world. We thought the market's misapprehension of what was going on in China was important enough to make three posts on Sunday:
‘Let it rot’: Once-flourishing middle class faces end of ‘Chinese Dream’
And regarding the Chinese property market:
May 2022
Copper: It Is All About China's Economy
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....September 1, 2022
"China tears down tower blocks in effort to boost stalling economy" (plus Keynes and copper)
Better to stick with the battery metals right now, though nickel is going into surplus this quarter or next, copper is as sensitive to the slowdown in Chinese housing construction as it is to upside in the green revolution, cobalt is on the way out of battery chemistry if Mr. Musk has his way and lithium has gotten so expensive it is now a bottleneck on the final-price of electric vehicles.
Of the four we are
betting copper trades down to last summer's low of $3.13, and maybe
below $3.00 before turning into a shiny red rocketship.
On the headline stuff, somewhere between 2010 and today the U.S. and the West lost their way on the rare earths and we've only posted sporadically since the Happy Time™ with MolyCorp and all the little scams, all the while reflecting back on what's probably the best book on investing that's been written since de la Vega's Confusion de Confusiones (Amsterdam, 1688...
Welcome to my world.
