By IFCMarkets

Falling Chinese fixed asset investment bearish for copper price

China’s economy endured a severe blow from coronavirus infection as quarantine measures resulted in slowing of activities and shutdowns of industrial enterprises. China’s industrial production, retail sales and fixed asset investment fell steeply in the first two months of 2020. Industrial production in China fell 13.5% in January-February over the same period a year ago, while fixed asset investment dropped 24.5%. At the same time retail sales tumbled 20.5%. China is the top copper consumer in the world, accounting for 49% of global copper consumption. Copper is extensively used in construction, which is a major component of fixed asset investment. And while cases of new coronavirus infections in China peaked the economy is far from recovering from the disruption caused from quarantine measures. Falling fixed investment and industrial output in China is bearish for copper price.

Summary of technical analysis

Market Analysis provided by IFCMarkets