Copper futures tumble on worries about Chinese property crisis

November 10, 2021 04:22 PM AEDT | By Arpit Verma

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Copper futures tumble on worries about Chinese property crisis — Image source: © Argus456 | Megapixl.com

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Highlights

Copper prices tumbled on Tuesday due to an ongoing property crisis in China.

However, the prices of the red metal grew a day earlier on Monday as the country's export growth beat forecasts.

Ease in power crunch and supply chain improvements will also help to boost copper prices.

Copper prices tumbled on Tuesday despite concerns about the shortages. December delivery copper futures last traded at AU$4.36 per pound as of 10 November 2021. The copper market is concerned about the lack of supplies. The key metals are desperately not only required in the green transition but in several infrastructure plans.

Joe Biden’s US$ 1 trillion infrastructure bill passed last week is expected to fund the construction of bridges and repair highways. Additionally, the bill can also fund new broadband and public transportation projects coupled with a network of electric-vehicle charging stations in the country.

The current drop in the prices is also underpinned by an ongoing property crisis in China as the real estate sector accounts for a huge share of copper consumption which was hit by a liquidity squeeze.

Apart from this, energy shortages in the country and electricity price hikes in Europe also posed risks of reduced demand for the industrial metal.

copper bars Source: © Gana123 | Megapixl.com

However, the prices of the red metal grew a day earlier on Monday as the country's export growth beat forecasts. The demand for the industrial metal is expected to rise in the future ahead of the winter holiday season.

Additionally, ease in power crunch and supply chain improvements will also help to boost copper prices. The copper stocks in the London Metal Exchange registered warehouses tumbled more than half since late August to 115,525 tonnes.

Bottom Line

Copper prices tumbled on Tuesday due to an ongoing property crisis in China which accounts for a significant share of copper consumption in the country.

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