Date
24 April 2018

Copper prices fall on China worries, WSJ says

Copper futures prices fell about 2 percent as concerns about the stability of China’s financial system sparked worries over the country’s future demand for the metal, the Wall Street Journal reported Wednesday. China’s short-term interest rates jumped to levels not seen since July as some companies tapped money markets to fund deadline tax payments and as worries spread about bad debts in the banking system, analysts at Scotiabank were cited as saying in a note. Adding to the tension, while China’s central bank refrained from removing liquidity from the domestic money market on Tuesday, authorities also avoided pumping liquidity into the system in recent days. The lack of open market activity is a sign of concern that tighter liquidity will hamper growth in the world’s second-largest economy, analysts said. China is the world’s largest copper consumer. Fears of slower economic growth there contributed to a 16 percent drop in copper prices during the first half of 2013, the Journal noted.

– Contact HKEJ at [email protected]

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WSJ, Oct 23

Copper Falls 2% on China Worries

Copper futures sank 2% as concerns about the stability of China’s financial system sparked worries over the country’s future demand for copper.

China’s short-term interest rates jumped to levels not seen since July as some companies tapped money markets to fund deadline tax payments and as worries spread about bad debts in the banking system, analysts at Scotiabank said in a note.

Adding to the tension, while China’s central bank refrained from removing liquidity from the domestic money market on Tuesday, authorities also avoided pumping liquidity into the system in recent days. The lack of open market activity is a sign of concern that tighter liquidity will hamper growth in the world’s second-largest economy, analysts said.

China is the world’s largest copper consumer, accounting for about 40% of global copper demand, and fears of slower economic growth there contributed to a 16% drop in copper prices during the first half of 2013.

Copper had pushed to a one-month high on Tuesday, boosted by recent data showing a rise in Chinese copper imports to a 19-month high and accelerating growth last month. Additionally, some investors bet on stronger demand for copper after a weaker U.S. jobs report bolstered expectations the Federal Reserve would keep its economic stimulus in place.

– Contact HKEJ at [email protected]

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