GREY:NEVDQ - Post by User
Post by
bogfiton Nov 15, 2022 9:54am
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Post# 35099532
The problem with China and the price of copper.
The problem with China and the price of copper.I briefly scanned the recent Chinese developer rescue plan. I can’t say I understand it well, however my brief review suggests that the plan is mainly meant to relieve pressure to repay current obligations now due and into the next year.
What wasn’t clear to me was how that would enable developers to finish their projects and allow buyers to move in; and that’s all of importance to copper investors. Chinese copper demand has constituted a major percentage of sales but only as it is needed to complete building.
Providing additional time for developers to meet obligations won’t necessarily mean an increase in finished projects. It may but I suspect this effort will fall short. Developers won't add to copper demand unless they start building again.
However, developer debt is not the only problem the communist regime will have to resolve.
"China likely to lose huge sums it has loaned to developing countries, warns analyst"
Three-fifths of the world’s developing countries are facing problems in repaying the vast sums of money they owe to China, one of the world’s largest single creditor nations, said an analyst
https://www.cnbctv18.com/world/china-likely-to-lose-huge-sums-it-has-loaned-to-developing-countries-warns-analyst-15164311.htm
Adding to the confusion and uncertainty in the copper market yesterday the headline,
Copper near 5-month high on China's property support; Fed warning caps gains
is followed by today’s headline -
Copper price retreats after hitting 5-month high
A notice to financial institutions from Chinese regulators outlined steps to support the industry, including loan repayment extensions, in a major push to ease the deep liquidity crunch which has plagued the property sector since mid-2020.
Meanwhile, receding worries about copper supply on the LME market due to rising stocks weighed on prices, while the premium for the cash over the three-month contract has retreated to near zero from $135 a tonne only three weeks ago.
b.