We all know how interlinked China and iron ore prices are, but copper also finds its lead from China. Chinese demand accounts for over half of global copper demand so as China travels through its business cycle, so does copper.

The chart, which featured in the latest edition of the Weekly Macro Themes, shows the combined official manufacturing and non-manufacturing PMIs for China. It's worth pointing out the reason for this: manufacturing drives part of copper demand (e.g. electronics, etc), and "non-manufacturing" which includes construction, shows the property demand driver side of things. So there is an economic rationale for this kind of relationship seen in the chart:

The latest manufacturing PMIs from China show the economic recovery is holding, and even strengthening, so this potential trend change - maybe even a new bull market in Copper, appears to have a fundamental backing.

See also the video on this topic: