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

What to read next
US export controls on recycled copper would have unintended consequences that could weaken the country’s domestic recycling and manufacturing ecosystems, the president of the Recycled Materials Association (ReMA) said.
The publication of Fastmarkets’ assessments for nickel 4x4 cathode, nickel briquette and nickel uncut cathode premiums in-whs Rotterdam was delayed on Tuesday July 16 because of a reporter error.
Fastmarkets has corrected its alumina index inferred prices, which were published incorrectly on Tuesday July 15.
The United States' copper recycling industry is ramping up pressure on policymakers to impose some form of export controls on high-purity copper scrap, arguing that current trade dynamics – particularly with China – are distorting prices, weakening domestic capacity and undermining national security goals.
Fastmarkets launched two new price assessments for Indonesia’s domestic trade in nickel ore on Tuesday July 15. The two price assessments are for domestic trades of Indonesian laterite ores with 1.6% and 1.2% nickel content. Indonesia now accounts for 60% of the global nickel supplies and while there is an official government reference price, known […]
US copper scrap market participants are shifting from COMEX to LME pricing in response to extreme price volatility and a new 50% copper import tariff. The change is influencing discount formulas, export strategies and long-term trading dynamics across the sector.