Since China is the world’s largest copper consumer, it’s important for investors in copper miners like Freeport-McMoRan (FCX), Glencore (GLEN-L), Southern Copper (SCCO), to keep track of China’s economic data. In this part, we’ll look at the key data points that copper investors should follow this week.
Fixed asset investment
China’s fixed asset investment data will be released on November 14. Notably, China’s fixed asset investment data missed analysts’ estimates for the last two months. In the first nine months of the year, China’s fixed asset investment data rose 7.5% year-over-year. China’s money supply growth and outstanding loan growth data are expected on November 15. The markets will follow the data points to get a sense of China’s economic activity.
So far, China’s economic activity has been better than expected in 2017. Along with supply-side issues that we saw earlier this year at leading mines including BHP Billiton (BHP) owned Escondida, a better demand environment supported copper prices.
However, there haven’t been any major supply-side disruptions since 1Q17. Copper markets will likely look for strong Chinese demand signals to support higher prices. Along with the short-term demand-supply dynamics, copper’s long-term fundamentals have come into play this year.
Most observers expect the global copper demand to grow at a healthy pace in the coming years due to the growing fleet of electric vehicles (TSLA). Read How Freeport-McMoRan benefits from Electric and Hybrid Vehicles to see how the shift to electric vehicles benefits copper miners.
You can also visit Market Realist’s Copper page for ongoing updates on the industry.