• 14 hours Bitcoin Fails To Stay Above $10,000
  • 19 hours Bill Gates And Big Oil Chase The Dream Of Nuclear Fusion
  • 21 hours Top Jeweler To Use Only Recycled Gold And Silver
  • 2 days America’s Multi-Front Meltdown
  • 2 days Gold Up As U.S. Civil Unrest Escalates
  • 2 days How BlackRock Became King Of ESG Investing
  • 3 days Americans Don’t Care if TikTok Is A Security Threat
  • 4 days What’s Next In The Trump vs. Twitter Drama?
  • 5 days Escalating Tensions Could Crush $52 Billion China-U.S. Energy Deal
  • 6 days The Fed Is Printing Money At Unprecedented Levels
  • 6 days How Is The Real Estate Market Handling COVID-19?
  • 6 days Gold Flat As Markets Await Fed Chair Speech
  • 6 days What Is Day Trading And Is It Right For You?
  • 6 days Energy CEOs See Big Payouts Despite Oil Price Crash
  • 6 days Saudi Arabia Is Fighting A War On Two Fronts
  • 6 days 40 Million Jobless As Pandemic Fuels Economic Collapse
  • 6 days What Do India's Latest Reforms Mean For Its Coal Industry?
  • 6 days Copper Glut Continues To Grow
  • 7 days How A Pandemic Made Americans Better Workers
  • 7 days The Trillion Dollar Space Race Crosses Another Milestone
Tightening Nickel Supply Threatens Electric Vehicle Boom

Tightening Nickel Supply Threatens Electric Vehicle Boom

Demand for battery metals continues…

Miners Are Weathering The Trade War Storm

Miners Are Weathering The Trade War Storm

While overall Chinese trade is…

Mining.com

Mining.com

Mining.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

Contact Author

  1. Home
  2. Commodities
  3. Industrial Metals

China's $570 Billion Stimulus Is A Boon For Copper

China Stimulus Copper

Copper and iron ore prices have held up surprisingly well as markets in the West belatedly come to grips with the coronavirus pandemic and China shifts focus from containment to rebuilding its economy following more than two months of inactivity. 

On Wednesday BMO Capital Markets held a conference call with PRC Macro, a consulting firm focused on China’s political economy, about the prospects for 2020 GDP growth in the country.

PRC Macro anticipates spending by Beijing of as much as $570 billion primarily focused on infrastructure. PRC Macro says “in order to declare an economic victory, a 5 percent growth rate is the absolute minimum  that will be acceptable”: 

There are two parts to the stimulus plan. 

The first, which is almost complete, is to cover cashflows at businesses impacted by weak demand. 

The second, just commencing now, is to bolster growth. Infrastructure spending is key, and much of the support (up to 4 trillion RMB) will come from policy banks. 

BMO notes the first stage in the China restart is to get factories going again (services would take longer) and is “well progressed,” noting that even in the centre of the outbreak – Wuhan – (China’s Detroit), automakers have been notified to restart operations, albeit with some restrictions.  

Build-a-bull

China is responsible for some 70 percent of the world’s seaborne iron ore trade, and half the world’s copper consumption. China last year produced 56 percent of the world’s steel and with rapid refinery expansion in recent years, the country also produces the majority of the world’s copper and other industrial metals.  Related: U.S. Regulators Take Aim At Foreign Investments

While panic selling of equities in the US and elsewhere have pushed markets into technical bear territory, that is, a decline in excess of 20 percent, industrial metals and raw material prices have held up relatively well.   

Copper trading in New York was set to close on Wednesday below $2.50 a pound ($5,500 a tonne) for the first time since May 2017, but year to date losses are only just into double digits.

The Chinese import price of 62 percent Fe content is actually up more than 2 percent for the week, trading at $90.05 per dry metric tonne on Wednesday, according to Fastmarkets MB, wiping out the steelmaking raw material’s pandemic-related losses.

By Mining.com 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment