Shihoko Goto is a Washington DC-based journalist who has spent the past decade writing about the international political economy, with a focus on financial markets. She has written for a number of publications over the years including United Press International, the National Journal Group, Dow Jones News Service, and the Wall Street Journal. Shihoko holds a BA in Modern History from the University of Oxford and and an MA in Political Science from Tokyo's Waseda University. Having been raised in Brussels, she is fluent in French as well as Japanese, and wishes she had more opportunities to improve her German.
Copper traders are taking a wait-and-see approach ahead of Friday’s speech from the Federal Reserve chairman. The red metal did, however, get some lift from China’s continued commitment to buy European government bonds as a means to stabilize the Eurozone.
Australia’s central bank expects the mining industry to wind down from its high in about a year’s time, and companies such as BHP Billiton have already postponed major copper project investments. But with supplies expected to tighten further, rival Rio Tinto is prepared to continue forging ahead with developing one of the world’s biggest copper mines. Who’s right?
Though tax hikes and violent labor disputes have plagued Zambia’s mining industry of late, investor interest, particularly from China, has not been deterred.
Chinese Premier Wen Jiabao raised hopes of stimulus this week with his comment that China is still facing economic challenges. Low inflation in the US is stirring the same hope in American investors.
Despite lower copper prices, the black market trade in stolen copper is thriving, and has led politicians in the US and the UK to crack down on the practice. The scrap copper market is also being supported by legitimate copper recycling.
China’s industrial output has reached a three-year low. That is seen by some copper traders as a blessing as it may push Beijing to once again take steps to stimulate economic growth, which in turn should drive up copper demand.
JP Morgan’s plans to set up an exchange-traded fund backed by physical copper could be in trouble, as US copper manufacturers, fearing hoarding and market manipulation, line up against the fund.
The European Central Bank’s decision to keep interest rates unchanged and not provide new stimulus measures has put a damper on copper demand, as has the Federal Reserve’s decision not to pursue further quantitative easing, at least for now.
