InvestorQ : Does China have a really major impact on the price of base metals and why is it that China has suddenly become so important to base metals?
Siya Saran made post

Does China have a really major impact on the price of base metals and why is it that China has suddenly become so important to base metals?

Answer
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krithika Saxena answered.
2 years ago


The rally in base metals started in mid 2016 with expectations that Trump’s $1 trillion investment in infrastructure will give a boost to base metals. Trump’s plans have faltered and have lacked specifics. However, base metals have still rallied. The recent report by the IMF has clearly underlined that the global GDP growth will be driven by the EU and Japan among the developed economies and India and China among the EMs. The US is likely to grow at just 1.7% against a global growth average of 2.8%. Therefore, demand for base metals from the EU and Japan will matter more than the US. China is looking to massive investments in infrastructure. The Chinese National Railways alone is planning to spend $400 billion in upgrading its rail infrastructure. In addition, China has also been encouraging its domestic companies to create copper inventories. All these factors are proving to be important drivers of base metal prices.