The Assay - Copper price bears shrug $280B China stimulus package
ADVERTISEMENT
The Assay - Mining investment news, insights and company profiles
Mining investment news, insights and company profiles
No Result
View All Result
Subscribe
  • Home
  • News
    • All News
    • Gold
    • Silver
    • Copper
    • Nickel
    • Lithium
    • Precious Metals
    • Base Metals
    • Battery Metals
    • Exploration
    • Development
    • Production
  • Articles
  • Assay Insights
  • Africa Insights
  • Videos
    • CEO Interviews
    • Investor Panels & Presentations
  • Company Profiles
  • Magazine
  • Newsletter
  • 121 Mining Investment
  • About
    • About Us
    • Our Team
    • Contact Us
    • Partners
The Assay - Mining investment news, insights and company profiles
  • Home
  • News
    • All News
    • Gold
    • Silver
    • Copper
    • Nickel
    • Lithium
    • Precious Metals
    • Base Metals
    • Battery Metals
    • Exploration
    • Development
    • Production
  • Articles
  • Assay Insights
  • Africa Insights
  • Videos
    • CEO Interviews
    • Investor Panels & Presentations
  • Company Profiles
  • Magazine
  • Newsletter
  • 121 Mining Investment
  • About
    • About Us
    • Our Team
    • Contact Us
    • Partners
No Result
View All Result
Subscribe
The Assay - Mining investment news, insights and company profiles
No Result
View All Result
Home Articles

Copper price bears shrug $280B China stimulus package

By Frik Els, Mining.com

byThe Assay
4 years ago
Reading Time: 3 mins read
Copper price bears shrug $280B China stimulus package

Copper was trading down for a third day on Monday as metal traders in New York shrug off the increasing likelihood of a strike at the world’s largest copper mine and the impact of fiscal stimulus in top metal consumer China.

Copper touched $2.76 or $6,080 a tonne on the Comex market, down a stomach churning 17% or $1,270 a tonne since hitting four-year highs early June.

Labour action in Chile and Peru was flagged at the beginning of the year as a catalyst for a higher copper price in 2018, but so far talks have been uncharacteristically smooth, with most agreements reached during early negotiations.

However, a strike at Chile’s Escondida, responsible for nearly 5% of primary global copper supply, now looks all but certain.  A 44-day strike in February-March last year crippled production at Escondida, which part-owner operator BHP expects will produce more than 1.2m tonnes in 2018.

Reuters reports the union at Escondida is expected to overwhelmingly reject the final contract offer from the Anglo-Australian miner.

Union members have until Wednesday to finish voting on the company’s proposal, when the union will conduct an official count. After that, either party can call for a period of government-mediated arbitration that could last as many as 10 days.

“Half our members have voted,” said union spokesman Carlos Allendes. “We hope for positive and overwhelming results, with around 80 percent rejecting the offer from Escondida.”

Upcoming contract negotiations could also lead to outages at Chile’s state-owned Codelco operations which include the Andina, El Teniente, Salvador, Ministro Hales and Gaby mines and the Caletones smelter.

Just today workers at Chuquicamata, Codelco’s second largest mine with output of more than 330kt last year downed tools over a dispute with management.

Together with Escondida, the Chilean operations have a capacity of 3m tonnes per year or roughly 15% annual global output.  Chile introduced new labour laws in April last year which most industry analysts consider worker-friendly.

BHP, which owns 57.5% of the mine, has spent nearly $8 billion expanding the mine (including a $3.4bn water plant) in the past five years to maintain output above one million tonnes.

Beijing boost

A week ago Chinese authorities announced a set of measures to ease fiscal and monetary policy conditions in an effort to soften the economic impact of trade tariffs imposed by the US.

The threat of an all-out trade war between the world’s largest economies has been the main reason for copper’s recent weakness. Copper is seen as a barometer of economic activity given the metal’s widespread use in industry and infrastructure. China consumes half the world’s copper.

Ratings agency Moody’s in a research note said Bejing’s announcements represent “a significant change towards more accommodative policy” and points out that the measures constitute more than $280 billion in stimulus measures:

In particular, the State Council said it would focus on deeper tax and fee cuts, including by making more companies eligible for additional tax deductions on research and development (R&D) spending. The government expects the latter measure to cut tax by RMB65.0 billion ($9.5 billion) in 2018.

It additionally said it would aim to speed up issuance of a planned RMB1.35 trillion of special bonds for local governments to support infrastructure projects this year and delivery of loans to small businesses through the state financing guarantee fund.

Also on Monday, the PBOC made a record injection of RMB502.0 billion into the financial system via its medium-term lending facility, which provides loans to commercial banks.

Performance enhancing

In a recent widely-quoted research note Citigroup argued for a rosy longer term outlook for copper telling investors in the sector to “prepare for a decade of Dr. Copper on steroids”:

“We look beyond the potential trade war to longer-term copper market fundamentals and we find that current prices of $6,200 a ton are nowhere near high enough to enable the market to clear.”

“Copper is set to outperform most other commodities under our coverage over the coming decade on a lack of mine supply growth.”

The bank sees average annual prices at $8,000 a tonne in 2022, passing $9,000 a tonne by 2028 under its baseline scenario according to a Bloomberg report.

Citigroup added a note of caution for the near term in its report, noting that if a full-blown trade war materializes, copper will fall “materially lower before it goes higher again.”

Copper price bears shrug 0B China stimulus package

TweetShareSend
Previous Post

Introducing Rio Tinto Ventures

Next Post

Latest Gold Demand Trends from the WGC

Related Posts

Eloro Resources Closes C$10.9M Bought Deal Financing
News

Eloro Resources Closes C$10.9M Bought Deal Financing

byColin Sandell-Hay, Contributor - The Assay
28 January, 2023
Vizsla Silver Undertaking $34M Brokered Private Placement
News

Vizsla Silver Undertaking $34M Brokered Private Placement

byColin Sandell-Hay, Contributor - The Assay
28 January, 2023
Boron Market Rocketing Up
Feature Story

Boron Market Rocketing Up

byColin Sandell-Hay, Contributor - The Assay
27 January, 2023
Argentina Lithium & Energy Extends Lithium Brine Zone at Rincon West
News

Argentina Lithium & Energy Extends Lithium Brine Zone at Rincon West

byColin Sandell-Hay, Contributor - The Assay
27 January, 2023
Fission Uranium’s Patterson Lake South Confirmed as Amongst World’s Elite Uranium Projects
News

Fission Uranium’s Patterson Lake South Confirmed as Amongst World’s Elite Uranium Projects

byColin Sandell-Hay, Contributor - The Assay
27 January, 2023
Galantas Gold Acquires Exploration Rights in Scotland
News

Galantas Gold Acquires Exploration Rights in Scotland

byColin Sandell-Hay, Contributor - The Assay
27 January, 2023
Next Post
Latest Gold Demand Trends from the WGC

Latest Gold Demand Trends from the WGC

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

ADVERTISEMENT

Popular Articles

  • Bolivia Maintains it Historic Profile as a Global Silver Centre

    Bolivia Maintains Its Historic Profile as a Global Silver Centre

    0 shares
    Share 0 Tweet 0
  • The Assay Guide to Palladium vs Platinum

    0 shares
    Share 0 Tweet 0
  • The Rise and Rise of Indonesian HPAL – But Can It Continue?

    0 shares
    Share 0 Tweet 0
  • Zinc Mining & Market Outlook 2022-2025

    0 shares
    Share 0 Tweet 0
  • Commodities Markets Stir in the Wake of China’s Reopening

    0 shares
    Share 0 Tweet 0
  • Home
  • News
  • Articles
  • Investor Discussions
  • CEO Interviews
  • Company Profiles
  • Newsletter
  • Magazine
  • About Us
  • Our Team
  • Contact Us
Hyve logo

Please note: This Web site and The Assay magazine and the information and materials on this Web site and in The Assay magazine are not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, any regulated products, securities or investments. This Web site and The Assay Magazine do not, and should not be construed as acting to, sponsor, advocate, endorse or promote any regulated products, securities or investments. This Web site and The Assay magazine and the information and materials on this Web site and in The Assay magazine do not, and shall not be construed as, making any recommendation or providing any investment or other advice with respect to the purchase, sale or other disposition of any regulated products, securities or investments, including, without limitation, any advice to the effect that any mining or metals related transaction is appropriate or suitable for any investment objective or financial situation of a prospective investor. A decision to invest in any regulated products, securities or investments should not be made in reliance on any of the information or materials on this Web site or in The Assay magazine. Before making any investment decision, prospective investors should seek advice from appropriately qualified and licensed financial, legal, tax and accounting advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

Privacy Policy

© 2023 The Assay

No Result
View All Result
  • Home
  • News
    • All News
    • Gold
    • Silver
    • Copper
    • Nickel
    • Lithium
    • Precious Metals
    • Base Metals
    • Battery Metals
    • Exploration
    • Development
    • Production
  • Articles
  • Assay Insights
  • Africa Insights
  • Videos
    • CEO Interviews
    • Investor Panels & Presentations
  • Company Profiles
  • Magazine
  • Newsletter
  • 121 Mining Investment
  • About
    • About Us
    • Our Team
    • Contact Us
    • Partners

Please note: This Web site and The Assay magazine and the information and materials on this Web site and in The Assay magazine are not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, any regulated products, securities or investments. This Web site and The Assay Magazine do not, and should not be construed as acting to, sponsor, advocate, endorse or promote any regulated products, securities or investments. This Web site and The Assay magazine and the information and materials on this Web site and in The Assay magazine do not, and shall not be construed as, making any recommendation or providing any investment or other advice with respect to the purchase, sale or other disposition of any regulated products, securities or investments, including, without limitation, any advice to the effect that any mining or metals related transaction is appropriate or suitable for any investment objective or financial situation of a prospective investor. A decision to invest in any regulated products, securities or investments should not be made in reliance on any of the information or materials on this Web site or in The Assay magazine. Before making any investment decision, prospective investors should seek advice from appropriately qualified and licensed financial, legal, tax and accounting advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

Privacy Policy

© 2023 The Assay

Go to mobile version