A Chinese Stimulus Package: Good for Copper?
Naturally, China is going to want to boost exports and industrial production. And they're going to hope they can stimulate borrowing without reflating the housing bubble. But any emphasis on export growth may hurt commodity prices without an accompanying and substantial effort to boost infrastructure development. Chinese copper smelters are seizing on a tax adjustment that eases the costs of exporting the red metal. But increased exports of copper likely mean a large flow of supplies straight to London Metal Exchange warehouses where supplies have been tight. Such a build is likely going to concern copper bulls that've been able to look past high shadow inventories in Shanghai bonded warehouses.
Market Vitals | 10 August 2012 [http://blackswantrading.squarespace.com/storage/market-vitals/081012_mv_china.pdf] ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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