China demand was still strong in December with trade data showing copper imports hitting record levels and increases in demand for both oil and iron ore. Copper demand was up 47 percent to over 500,000 tonnes. China is the world largest consumer of copper, coal, and cotton to name just a few commodities.
Of course, the Chinese seem to have gotten fairly smart about when to enter the market. They are looking for weakness to be buyers. The Chinese are also looking to further develop pricing power through commodity futures markets.
Of course, the Chinese seem to have gotten fairly smart about when to enter the market. They are looking for weakness to be buyers. The Chinese are also looking to further develop pricing power through commodity futures markets.
China can produce a floor on commodity prices. They will not be able to stop a price decline, but if the Chinese provide stimulus to their economy, there will be a direct impact on commodities which will be much larger than anything that will happen from the Fed. To be a commodity analyst, you have to be a China macro specialist.
No comments:
Post a Comment