Metal production in China is picking up again
by David Fleschen
Even though the initial gains melted somewhat yesterday, the mood of market participants has recently brightened. Metal prices continue to rise moderately this morning, probably supported by the promise of numerous central banks and finance ministers to contain the real economic consequences of the corona virus by means of expansionary measures if necessary (see precious metals above). Copper, for example, rises to $ 5,740 a ton. For fear of a possible infection, however, numerous major events continue to be canceled, such as the CRU-Cesco World Copper Conference in Chile, which should have taken place in three weeks. The LME Asia Week, which was scheduled for early May in Hong Kong, had already been canceled.
While companies are struggling with the corona virus in some parts of the world, the Chinese economy is on track to return to normal. The association of the Chinese non-ferrous metals industry sees a gradual recovery in its sector in the second quarter and a complete "recovery" in the second half of the year. This assessment is based on the assumption that metal demand in China will improve in the second half of the year, potentially supported by government stimulus measures. According to a survey by the association among 241 smelters, these have now increased their utilization to an average of 90%. It is therefore significantly higher than that in the steel sector, which is estimated at less than 70%. An example of the higher capacity utilization is the largest Chinese copper producer: According to its own statements, it fully restarted its mining and smelting activities at the end of last week as copper demand picked up again.
Source: Commerzbank Research, Photo: Fotolia