Copper prices have gone the way of aluminum and crude oil.
Chinese trade data confirmed the expectation that demand will “remain slack” in the Far East nation, according to a recent report from the Wall Street Journal. Citing data from China Customs, the news source reported that national exports dropped 8.3% in July, year-over-year.
This data also confirmed that imports fell for the ninth consecutive month, to 8.1% in July, year-over-year. This was a whole 2 percentage points higher than the year-over-year decline seen in June (6.1%).
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“As long as China worries, eurozone woes and dollar strength dominate the headlines, sentiment across metals markets will be weak,” Casper Burgering, senior economist, manufacturing and industrial metals, at ABN Amro Bank, told the WSJ.
China Devalues Yuan in a Major Way
Also impacting copper prices and other commodity prices is the value of the yuan, which was cut by the central bank by 1.9%. This is the largest one-day drop since China ended their dual-currency system more than 20 years ago.
This significant devaluing of the yuan has caused a ripple effect through global markets as policy makers begin to search for ways to support exporters and boost the impact of market pricing in China, according to Bloomberg Business.
We here at MetalMiner™ have some serious doubts that China “doesn’t manipulate” its currency. And yet, everyone wants the Chinese yuan to be treated “the same” as the US dollar?
So What Should My Industrial Buying Strategy Be?
You can find a more in-depth copper price forecast in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: