- Write by:
-
Wednesday, April 10, 2024 - 22:16:05
-
135 Visit
-
Print
Chinese investors are snapping up stocks tied to high-flying metals from copper to gold, aiding an onshore market facing an uphill battle to cement a nascent rebound.
A gauge tracking resources firms listed in Shanghai and Shenzhen has gained 10% in the past month, becoming the best sub-index of the CSI 300 benchmark. Zijin Mining Group Co., a major gold and copper producer, and Shandong Gold Mining Co. have led the rally and both gained over 20% in this period.
Driving the demand for producers of base metals like copper were signs of a recovering industrial sector in China, a domestic supply squeeze and expectations for global interest rates to drop. While gold is another beneficiary of monetary easing, the fervor for the precious metal also highlights Chinese investors’ hunger for yield as the country’s property woes deepen and returns on bank deposits dwindle.
Those factors “are leading to bullish views on copper price and stocks” including Zijin Mining and CMOC Group Ltd., Morgan Stanley analysts including Rachel Zhang wrote in a note. Similarly, aluminum producers such as Aluminum Corp. of China Ltd., and China Hongqiao Group Ltd. may continue enjoying high margins in the medium term due to supply tightness, they wrote.
The sector’s stock rally has coincided with a commodities bull run that has sent gold to new records and copper toward a 15-month high. It’s one of the few remaining tailwinds behind China’s local equities that have started languishing again after two months of gains.
CSI 300, which is dominated by state-run, old-economy stocks from liquor makers to banks and industrial firms, has risen 2.2% this year and remains one of the world’s worst performing major indexes. A gauge of Chinese firms listed in Hong Kong, which also features some of the nation’s most innovative technology companies, is up 4.3%.
To some observers, however, the rally in metal stocks is already looking a bit bubbly.
“It remains unclear whether China’s economic recovery is solid enough,” said Shen Meng, director at Chanson & Co. in Beijing. “The recent sharp gains were also driven by hot money, whose real motivation is seeking immediate returns.”
Short Link:
https://www.miningnews.ir/En/News/628247
![Copper price set for worst week since 2022 as China Plenum disappoints](/Incsys/Photo.aspx?image=/Uploads/News/20240723142415052.jpeg&width=236&height=180)
Copper prices have retreated from a record in May on concerns about the strength of demand in China, where growth was ...
![Zimbabwe may sell 40% stake in a key gold mine to raise capital](/Incsys/Photo.aspx?image=/Uploads/News/20240723142307013.jpg&width=236&height=180)
Zimbabwe’s state-owned Kuvimba Mining House is broadening its search for equity partners and financiers for its gold and ...
![Copper output from Codelco this year to top 2023, chairman says](/Incsys/Photo.aspx?image=/Uploads/News/20240723141842581.jpg&width=236&height=180)
Codelco chairman Maximo Pacheco said on Thursday that the state-run copper giant expects production this year to outdo ...
![China copper smelters eye more output cuts as raw material supply tightens](/Incsys/Photo.aspx?image=/Uploads/News/20240723141202374.jpeg&width=236&height=180)
A shortage of copper concentrate this year has forced a few smelters in China to cut output, and more curtailments could ...
![Mercedes, Stellantis in talks to back Serbia’s lithium plans](/Incsys/Photo.aspx?image=/Uploads/News/20240723140454191.jpg&width=236&height=180)
Mercedes-Benz Group AG and Stellantis NV are in discussions with Serbia’s government to invest in lithium-processing and ...
![China copper smelters plan to cut output after margins fall](/Incsys/Photo.aspx?image=/Uploads/News/20240723135544917.jpg&width=236&height=180)
Two Chinese copper smelters have laid out plans to reduce production next year as an imbalance between mine supply and ...
![Copper price edges down to two-week low amid demand uncertainty](/Incsys/Photo.aspx?image=/Uploads/News/20240723135256664.jpeg&width=236&height=180)
Copper edged down to a two-week low in choppy trading, amid uncertainty over supply and demand in China and weakness in ...
![Antofagasta expects 2024 copper output at low end of yearly forecast](/Incsys/Photo.aspx?image=/Uploads/News/20240723135052294.jpg&width=236&height=180)
Chilean miner Antofagasta said on Wednesday it expects full-year copper output at the lower end of its 670,000 to ...
![BHP posts second straight year of record iron ore production](/Incsys/Photo.aspx?image=/Uploads/News/20240723134042848.jpg&width=236&height=180)
BHP Group on Wednesday reported record annual iron ore production for a second consecutive year, helped by improved ...
No comments have been posted yet ...