By Jonathan Barratt


Economic numbers from China last week and the lack of any follow through on stimulus talks from central banks over the last few weeks has seen some weakness reemerge into the copper market. Although it has been a ranging market for some time we always get nervous at the lower end of the range as the potential for a change in trend is with us. As China is the number one consumer of the metal in the world the price of copper is tied to her economic performance.

Of late the data, whether its was industrial production slowing to 9.2%, its weakest since May 2009, or retail sales falling by 0.6%, and where economic growth has been falling since 2011(7.2%), the story remains the same... the economy is not strong. The numbers when compared with the performance in the western economies are good however, but are weak by Chinese standards. As a result of the weak numbers we are continually suggesting that we will get some stimulus for the Central Authority. This mantra has been with us for some time as it has worked in the past in trading strategies, however it is losing momentum.

Weak numbers equate to stimulus and commodities go higher. However, if you think outside the square why would China want strong commodities, why would