China virus roils commodity markets
China's virus has roiled commodity markets as traders assess the epidemic's economic impact on a nation heavily dependent on raw materials.
China is the world's biggest importer of major commodities and has a voracious appetite in particular for base metals.
China is Namibia’s biggest export market.
According to the latest figures by the Namibia Statistics Agency (NSA), domestic exports to the Asian giant in the third quarter of 2019 totalled nearly N$4.6 billion – nearly a quarter of all exports during the three months under review.
Most of Namibia’s export earnings from China in the third quarter was from copper.
Base metals such as copper have in particular suffered since mid-January, while oil has recovered somewhat after heavy falls and haven investment gold has benefitted.
Copper, considered a barometer of the economic cycle, has slumped almost 10% since mid-January, when fears over the virus began to heavily influence direction of financial markets.
In line with most commodity and equity markets last week, copper has however managed a rebound to stand at US$5 660 per tonne on Friday from US$5 567 a week earlier.
‘Fighting back’
Sucden analyst Liz Grant said commodity prices are starting to fight back also after China on Thursday said it would halve tariffs on US$75 billion worth of US imports.
"While this move is in part connected to the phase 1 US/China trade agreement, it was also widely viewed as an attempt to ease investor anxiety around the economic impacts of the virus," she said.
"Commodity prices, and energy prices in particular, have been hard hit by the outbreak of coronavirus in China and the prospect of lower global commodities demand," said analyst Caroline Bain at Capital Economics research group.
"There is still too much uncertainty to factor the virus into our forecasts," she added, as China delayed the release Friday of its latest trade data.
For gold, the situation was different. Considered a haven investment in times of economic unrest, the precious metal initially profited from fears of a virus-fuelled economic slowdown.
By Friday however, gold stood at US$1 566.93 an ounce, down from US$1 589.16 a week earlier. – Own report and Nampa/AFP
China is the world's biggest importer of major commodities and has a voracious appetite in particular for base metals.
China is Namibia’s biggest export market.
According to the latest figures by the Namibia Statistics Agency (NSA), domestic exports to the Asian giant in the third quarter of 2019 totalled nearly N$4.6 billion – nearly a quarter of all exports during the three months under review.
Most of Namibia’s export earnings from China in the third quarter was from copper.
Base metals such as copper have in particular suffered since mid-January, while oil has recovered somewhat after heavy falls and haven investment gold has benefitted.
Copper, considered a barometer of the economic cycle, has slumped almost 10% since mid-January, when fears over the virus began to heavily influence direction of financial markets.
In line with most commodity and equity markets last week, copper has however managed a rebound to stand at US$5 660 per tonne on Friday from US$5 567 a week earlier.
‘Fighting back’
Sucden analyst Liz Grant said commodity prices are starting to fight back also after China on Thursday said it would halve tariffs on US$75 billion worth of US imports.
"While this move is in part connected to the phase 1 US/China trade agreement, it was also widely viewed as an attempt to ease investor anxiety around the economic impacts of the virus," she said.
"Commodity prices, and energy prices in particular, have been hard hit by the outbreak of coronavirus in China and the prospect of lower global commodities demand," said analyst Caroline Bain at Capital Economics research group.
"There is still too much uncertainty to factor the virus into our forecasts," she added, as China delayed the release Friday of its latest trade data.
For gold, the situation was different. Considered a haven investment in times of economic unrest, the precious metal initially profited from fears of a virus-fuelled economic slowdown.
By Friday however, gold stood at US$1 566.93 an ounce, down from US$1 589.16 a week earlier. – Own report and Nampa/AFP
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