Copper and other base metals experienced declines as renewed concerns about China’s property market weighed on demand expectations, according to an ANZ note. Bloomberg reported that China Vanke was rejected for a short-term loan by two major domestic banks, raising default fears and adding to signs of financial strain in the sector. These developments coincide with the industry gathering in Shanghai for LME Asia Copper Week.
Trafigura, a trading firm, cautioned that China’s property downturn is negating stronger copper consumption linked to the energy transition, thereby limiting overall demand. ANZ reported that since 2020, China has depended on export-oriented manufacturing, instead of its domestic property market, for incremental copper demand.
Iron ore futures also weakened due to the deteriorating outlook. ANZ noted the property sector’s continued importance in driving iron ore demand, despite growth in non-property industries. The China Iron and Steel Association reported that steel inventories at major mills increased by 5.9 per cent to 15.5 million tonnes in early November, marking a 13.4 per cent year-on-year rise.
Losses were limited following reports that Chinese policymakers are considering new support measures for the property market. China Vanke, referenced above, is one of China’s largest residential developers. ANZ is a major banking and financial services company operating in Australia and internationally.
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