Yahoo Finance How Did Copper Perform? What Difference Did China Make?
Base Metals and Their Welcome Rise Last Week
LME copper consolidated around $4,600
Copper remained consolidated in the week ended February 20, 2016, despite supporting data from China over the week. China is the biggest consumer of copper in the world. It accounts for almost half of the global demand. The major economic releases of China will have an effect on copper prices. The copper in LME (London Metal Exchange) consolidated around $4,600 per metric ton last week.
Positive start by Chinese traders and loan data
Chinese traders who were out of the market for Chinese Lunar New Year’s Day week resumed trading last week. This gave support to copper prices and gave a positive start to this week. The same positive momentum was carried over the week after the release of the Chinese loan data. The data showed that Chinese banks released loans of 2.5 trillion yuan of new loans in January. This data made copper surge. A surge in new loans reflects the increase in demand and also shows the steps taken by the Chinese to keep the monitory policy loose to fight the economic slowdown.
Copper ended the week on a positive note
The automotive industry is one of the main consumers of copper. Since China is the world’s largest automotive market, Chinese vehicle sales data will impact copper prices. According to the data released at the end of last week, Chinese vehicle sales in January 2016 came in at 2.5 million units in January, a growth of 7.7% compared to sales in the same month of 2015. This is positive for copper demand and surged prices on the last trading day of the week. These factors resulted in a copper gain of 2.7% in LME and 2.5% in Comex last week.
Along with copper, major base metal miners also gained last week. Freeport-McMoRan (FCX), Glencore (GLNCY), Alcoa (AA), and BHP Billiton (BHP) rose 25.1%, 18.4%, 2.3%, and 5.6%, respectively. The PowerShares DB Base Metals Fund (DBB) and the SPDR S&P Metals and Mining ETF (XME), both base metal ETFs, rose 2.7% and 1.6%, respectively, in the week ended February 20, 2016.
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