Copper prices are on the ascent, thanks in part to the latest Chinese trade data and genuine excitement among investors over worldwide growth and capacity cuts.
According to a recent report from The Wall Street Journal, China’s debt crackdown earlier this year led to an adverse effect on metal prices and general worry from investors.
That worry has turned to elation, with copper prices up 7% due to capacity cuts in China. Meanwhile, iron ore prices are up more than 20% since the end of June.
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The most recent Chinese trade data, representing July, painted a different picture with year-over-year growth of Chinese imports of copper concentrate slowing from June’s growth.
Nathaniel Taplin wrote for the Wall Street Journal: “Overall import and export growth also slowed, hinting that the lift to China from rebounding global trade may be close to its peak.”
The takeaway for copper investors impressed with Q2 Chinese growth? Not to get too excited until the whole story is revealed as China’s demand for metals, specifically copper, is weaker than expected.
Copper Prices Still Experiencing a Stellar 2017
Our own Irene Martinez Canorea wrote earlier this week that copper is outperforming all other base metals this month with copper traded on the London Metal Exchange up 7.8% in July.
She wrote: “The sharp increase in copper prices came after an announcement of a possible ban of copper scrap in China by the end of the year. The increase in copper prices was accompanied by heavy volume, which may signal a stronger uptrend.”
How will copper and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.
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