Can Chinese support lift copper prices? [Video]
|China’s outlook has been buoyed over recent days by a series of positive stories. The reduction of some Covid restrictions by the National Health Commission, rumours of China planning its exit from Covid Zero, a 16-point property plan to reduce the chances of a property sector collapse, and the thawing of some US-China tensions have all helped lift sentiment.
This positive sentiment can support expectations of more demand for industrial metals from China. China is the world’s biggest user of copper, which is mainly used in construction, so this could mean the range of China’s support measures provides support for copper prices over the coming weeks.
Notice how, over the last 25 years, between November 20 and February 28, copper has gained 17 times for an average of 5.57%. So, although the seasonals are not the strongest, there is still a strong bias for strength. Will this bias, plus Chinese stimulus and re-opening hopes, boost copper prices this year?
Major trade risks: The major trade risk here is that China has a widespread Covid outbreak which reduces economic activity once again.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.