What Recent Chinese Economic Data Suggests for Glencore

Freeport-McMoRan and Copper Slip from 2017 Highs: What’s Next? PART 3 OF 7

Chinese economic data

Because China is the key driver of global metals demand, its crucial for investors in companies like Glencore (GLNCY) and Freeport-McMoRan (FCX) to keep track of Chinese economic data. In this data, we’ll look at some of the recent Chinese copper demand indicators.

Copper imports

Analysts see China’s copper imports data as a leading indicator for the country’s copper demand (BHP) (RIO). China imported 390,000 metric tons of unwrought copper and copper products in August 2017, compared to 350,000 metric tons in August 2016. Although imports have risen 11.4% on a yearly basis, they’re flat on a month-over-month basis.

China’s fixed asset investment growth slowed to 7.8% between January and August compared to 8.3% in the first seven months of the year. This growth rate was the lowest in 18 years, and the data was worse than expected. 

China’s August industrial output and retail sales also missed consensus estimates. A flurry of negative data points from China fueled pessimism in global copper markets (SCCO).

However, China’s car sales have continued to grow. According to the China Association of Automobile Manufacturers, auto sales in China in August 2017 stood at ~2.19 million vehicle units—a year-over-year rise of 5.3%. Notably, Chinese car sales are growing at a time when we are seeing moderation in US car sales.

In the long term analysts, expect higher copper demand from the automotive industry, led by the growing demand for electric cars. We’ll explore this aspect in detail in the next article.

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