There is a growing body of evidence to support the theory that China’s economy is slowing down. One of the clearest signs is the recent drop in metals prices. If the Chinese economy spirals down, it could tank the market for metals and other commodities along with it. Neil Hume reports for the FT:
Mining stocks were under pressure on Thursday as selling of industrial metals intensified on concerns about demand from China, the world’s biggest consumer of raw materials.
Copper fell 2.5 per cent and slipped below $6,000 a tonne for the first time in a year, while zinc was off 3.9 per cent at $2,515, and nickel lost 2.6 per cent to $13,320.
That in turn weighed on the mining sector. Chile-focused copper producer Antofagasta fell 2.3 per cent 942p, while Vedanta Resources was down 4.2 per cent at 774p and Anglo America dipped 1.1 per cent at 1,671p.
The selling came as China’s currency fell again. A weaker renminbi makes it more expensive for the country to acquire US dollar denominated commodities.
“Chinese economic growth is showing signs of a slowdown, which bolsters our view for metal demand to be weaker year-on-year in 2018 and 2019,” said BMI Research in a report.
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