CHINESE SHARE SCARE: Where next for copper after the crash?

Copper prices have rebounded by as much as $500 from the six-year lows seen on Tuesday, after the Chinese government took further measures to catch freefalling domestic stocks.

Copper prices have rebounded by as much as $500 from the six-year lows seen on Tuesday, after the Chinese government took further measures to catch freefalling domestic stocks.

However, with more than half of all Chinese equities suspended and with large investors prohibited from selling their positions, conditions in the stock market can hardly be said to have returned to normal.

In all corners of the copper market, the question being asked is will the equities selloff get worse, and what effect will it have on copper prices?

Metal Bulletin sister publication Copper Price Briefing has been asking the same question to producers, consumers, traders, analysts, brokers and hedge funds this week as prices have crashed and rebounded. Here are some of the factors they are keeping an eye on.

CHINESE SHARE SCARE
Expect violent price swings in copper
Price swings could give fresh impetus to copper options trade
Weak demand means consumers unlikely to fix at today’s low levels
Market focuses on copper cost curve as Goldman Sachs expounds bear view

Mark Burton
mburton@metalbulletin.com
Twitter: @mburtonmb

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