Copper and China

Callum Thomas

Topdown Charts

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:

(China copper 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: 

Callum Thomas
Head of Research
Topdown Charts

Callum is Head of Research at Topdown Charts. Topdown Charts is a chart-driven macro research house covering global Asset Allocation and Economics.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.