China's Commodity Markets Reflect Uneven Economy
China-linked commodity markets sent mixed signals last week, reflecting an uneven economy. On one hand, copper prices surged sharply, while oil retreated as global supply fears eased.
The divergence in commodity prices is largely due to China's weak property-related demand, which continues to weigh on steel consumption. However, manufacturing and electrification are supporting demand for industrial metals.
Iron ore prices edged higher despite little evidence of a strong recovery in Chinese construction. The most-traded contract on the Dalian Commodity Exchange rose by 1.1% to $107 per tonne last week, but the upside remains constrained.
Copper prices told a different story, rising by 3.4% to around $14,363 per tonne on the London Metal Exchange due to distorted global supply flows and expectations of future US tariffs.