China’s outlook has been buoyed over recent days by a series of positive stories. The reduction of some Covid restrictions by the National Health Commission, rumours of China planning its exit from Covid Zero, a 16-point property plan to reduce the chances of a property sector collapse, and the thawing of some US-China tensions have all helped lift sentiment.

This positive sentiment can support expectations of more demand for industrial metals from China. China is the world’s biggest user of copper, which is mainly used in construction, so this could mean the range of China’s support measures provides support for copper prices over the coming weeks.

Notice how, over the last 25 years, between November 20 and February 28, copper has gained 17 times for an average of 5.57%. So, although the seasonals are not the strongest, there is still a strong bias for strength. Will this bias, plus Chinese stimulus and re-opening hopes, boost copper prices this year?

Major Trade Risks: The major trade risk here is that China has a widespread Covid outbreak which reduces economic activity once again.

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