China: The rally of the dollar versus the euro compelled the copper prices
to fall down for the first time on Monday post three days of market volatility. It has been reported that the global worries may lead to a decline in the demand of metal products and their prices too.
CEO of Sarhan Capital, Adam Sarhan says, “This report, coupled with the other lower-than-expected economic reports from China in recent weeks is causing some concern about the health of the Chinese economy going forward, and more importantly, what the ramifications are for the global economy.”
At present, China is responsible for 40 per cent of the world’s copper demand. The economy has posted its largest trade deficit in the past ten years. Even the London Metal Exchange came down $45 at $8,445 a tonne.
Sarhan also said, “The last time Bernanke spoke on February 29, gold
and silver experienced a massive sell-off, so obviously the world is very focused on what the FOMC is going to do, and more importantly, if Bernanke adds any additional hints about QE3, to either confirm or dispel his last testimony.”
Caroline Bain, economist at the Economist Intelligence Unit says, “We had slower GDP growth and slower copper consumption growth in China this year, but we continue to expect the authorities are certainly going to do as much as they can to prevent a sharp downturn.”