Consumption trends--Fiscal stimulus packages: few short term benefits for copper

摘要

The loss of trust in banks means that the international financial system is effectively broken. Monetary policy options have also largely been exhausted. Therefore, fiscal stimulus packages by governments around the world are gathering momentum, as government spending remains the main weapon left to halt the economic meltdown. However, fiscal packages may not be large or targeted enough to do more than slow the rate of decline in economic activity and build up government debt, without laying solid foundations for a sustainable recovery. Fortunately for copper a focus of many packages is infrastructure spending. Unfortunately, copper usage generally comes in at later stages of such projects, so the short term impact will be limited. However, should the crisis be turned into an opportunity to transform economies, copper could benefit from tightening of energy efficiency standards or higher renewable energy uptake.