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Reduced activity in the copper trade due to the decline of the Chinese construction

10 June 2014

The growth and the continuous development of Chinese industry became powerful enough not only the foundation for the development of mining enterprises in China. Often the interest of manufacturers and builders in the eastern states is not limited to domestic supply and enable additional sales of its products in some European countries. Therefore, the decline in the rapid increase of Chinese production capacity not only leads to a lull in the domestic trade market, but also makes a dissonance in the stability of the European economy. His opinion on this matter expressed the analytical department of Societe Generale in respect of the development of the copper sector. Their position on this issue is highly controversial and is due to the fact that each individual metal in varying degrees, depending on the industry in China. This condition explains the very large price fluctuations run on one or another type of raw material in the European Metal Exchange today. Thus, a slowdown of construction works in the eastern country will inevitably affect the value of copper. After all, China's construction companies were the main consumers of this raw material. Destabilization of the situation in the copper sector entrepreneurs will start to be felt in the coming months. If the level of demand will decrease, and the proposal on the other hand will continue to grow in the near future the price equivalent of a ton of copper will fall to the level in six and a half thousand dollars. By the way, as growth stocks from manufacturers of raw material price decline is possible to continue. However, it is able to finish both script development, reducing the price of copper semi-finished products will lead to failure of producers to their sales and the reduction of production capacity of some enterprises for the extraction of non-ferrous metals. It is worth noting that such dire predictions are without prejudice to the metal market as a whole. According to analytical department of Societe Generale, the market price of lead, zinc, nickel and tin on the other hand will continue to grow. After all, the value of these materials in the industrial complex is growing constantly, and the scope of their impact on the various industrial and household limits are gradually increased. This situation will ensure a stable future for themselves the supplier, which can be sensitive development trend and adapt quickly to the new infrastructure of non-ferrous metals market.

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