This slowing increase in Chinese house prices have seen over the weekend puts the focus back on the medium-to-longer-term issue, which is oversupply in the real estate market. Euphoria in the steel and iron ore markets is clearly fading again based on the home price data and have some spill over in MCX Copper and aluminum.
Copper Jump on Weak Dollar
Chinese steel-related commodities futures dived on Monday, erasing last week’s rally as investors felt the previous gains outpaced physical demand for steel in China. Both MCX Copper and aluminum were weaker for much of the session but clawed into positive territory before the close as the dollar index slipped, making commodities priced in the U.S. currency cheaper for buyers using other currencies. Benchmark MCX Copper, mainly used in the construction and power sectors, closed up marginally.
MCX Copper had rallied 12 percent from mid-June to mid-July, topping out at $5,032 last week, partly on hopes for more stimulus from Chinese authorities. Zinc and nickel also remained in positive territory, as speculators continued their buying spree, fuelled by concern about possible shortages in the two metals. — Neal Bhai Reports