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Copper Industry April Update (Part 6 of 10) (Continued from Part 5) Chinese copper demand
In the last part of this series, we learned that Chinese copper inventories have been steady so far in April. Copper inventories generally start to decline after March, when China returns from the New Year’s holidays. Refined copper production increased by 12% in February on a YOY (year-over-year) basis. Along with these supply-side indicators, investors should track copper demand as well.
Real estate slowdown
Building sales are an important indicator of China’s real estate industry and so are widely tracked. The chart above shows the YOY change in building sales there. As you can see, building sales fell by 9.3% in March. This follow as 15.8% dive in February, the worst monthly drop in three years.
Building sales in China have fallen in every month since February 2014. The country’s real estate sector is clearly in a downward trend.
Negative industry impact
Copper is widely used to produce plumbing material. It’s used in making taps, valves, and other bathroom fittings. Copper is also used in water pipes and fire sprinkler systems in buildings. A slowdown in the real estate sector of course negatively impacts Chinese copper demand.
Less Chinese copper demand is negative for copper producers including Newmont Mining (NEM), Turquoise Hill Resources (TRQ), and McEwen Mining (MUX). Diversified miners such as Glencore (GLNCY) are also negatively impacted by the slowdown in Chinese copper demand.
NEM currently forms 5.49% of the Market Vectors Gold Miners ETF (GDX).
Property prices have also been weak in China. In February, new home prices fell in 66 out of 70 top Chinese cities. Lower property prices negatively impacts investor sentiment.
There are several other indicators of Chinese copper demand that you can track. We’ll discuss these in our next part.
Continue to Part 7 Browse this series on Market Realist:
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McEwen Mining
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PRODUCER |
CODE : MUX |
ISIN : US58039P1075 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
McEwen Mining is a gold development stage company based in Canada. McEwen Mining produces gold, silver in Argentina and in Mexico, develops gold and silver in Mexico, and holds various exploration projects in Mexico. Its main assets in production are MAGISTRAL MINE in Mexico and SAN JOSE ARGENTINA in Argentina, its main asset in development is EL GALLO MEXICO in Mexico and its main exploration properties are PALMARITO, GOLD PICK AND GOLD RIDGE, TONKIN PROJECT and MAGISTRAL in Mexico and LOS AZULES ARGENTINA and LIMO in Argentina. McEwen Mining is listed in Canada, in Germany and in United States of America. Its market capitalisation is US$ 3.3 billions as of today (€ 2.9 billions). Its stock quote reached its highest recent level on April 08, 2011 at US$ 9.87, and its lowest recent point on July 29, 2022 at US$ 0.32. McEwen Mining has 337 054 594 shares outstanding. |