Copper bounces after liquidation fears

摘要

Rising credit concerns and signs of slower growth in China have taken their toll on the copper market with spot prices shedding almost 10% year-to-date on fears that much of the metal held as collateral against loans could be dumped on to the market. But fears of a mass unwinding have begun to subside and investors seem to have found value at current lower levels with copper proving the top performer of its industrial metal peers last week, gaining 3%. Recent highs in copper inventories were sparked by a wave of financing collateralised by commodity imports after December's cash shortage caused a spike in inter-bank lending rates and forced China's lending banks to seek alternative funding avenues.