Global markets plummeted this week on China slowdown worries, dragging industrial metals prices along and increasing future demand concerns, which has prompted analysts to question whether Beijing is doing enough to address the country’s economic contraction.<\/p>\n
BMO analyst Colin Hamilton said in a note to investors Friday there were many questions in the metals market raised by the trend in China of positive fiscal spending statements<\/a>, but weak consumer-led data points.<\/p>\n One of the main questions, he wrote, is whether the Chinese government is doing what\u2019s needed to stop the downward trend.<\/p>\n \u201cThis really is the big question for the current year, and the jury is still out,\u201d Hamilton said. \u201cWe anticipate the measures taken will start to yield results towards the end of the first quarter.\u201d<\/p>\n Beijing has adopted a series of fiscal and monetary stimulus measures since the summer, but a factory survey this week showed China\u2019s manufacturing sector contracting \u2014 the latest in a string of data indicating that growth continues to slow down.<\/p>\n The country\u2019s central bank has announced it would inject a $117 billion into the banking system by cutting the share of deposits that commercial banks must hold in reserve, in an effort to boost lending.<\/p>\n To top that off, Kevin Hassett, chairman of the White House Council of Economic Advisers, cautioned Thursday that more U.S. companies can be\u00a0expected\u00a0to lower earnings forecasts as the softer Chinese economy cuts into their sales.<\/p>\n Despite the gloom and doom, BMO Metals believes it\u2019s \u201chighly unlikely\u201d for 2019 to become the year China\u2019s debt crisis comes home to roost and growth slumps. \u201cRisks are rising; however, we think the country still has enough wiggle room to avoid systemic risk,\u201d Hamilton noted.<\/p>\n Some of the end-use areas in which the analyst expects better demand growth over 2019 are, in fact, those exposed to Chinese infrastructure. These include high speed rails, UHV lines, electric vehicles\u2019 charging stations, and, especially, packaging and machinery.<\/p>\n In terms of the so-called battery metals, BMO warns that China\u2019s decision to lower many of its EVs subsidies for 2019 by about 30% compared to last year, is nothing but bad news for nickel, though it expects the impact on penetration rate forecasts to be limited.<\/p>\n The BMO analyst concludes its note by saying that metals producers may surprise this year, as cash-rich miners have potential to show better productivity at existing assets and lower like-for-like costs.<\/p>\n The post China slowdown a big threat to industrial metals in 2019 \u2014 analyst<\/a> appeared first on MINING.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" With metals ringing off the new year on a weak note, both price- and demand-wise, BMO Metals says the main questions for 2019 revolve around China and whether its government is doing enough to slow the country’s economic contraction.<\/p>\n The post China slowdown a big threat to industrial metals in 2019 — analyst<\/a> appeared first on 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of the main questions \u00a0is whether the Chinese government is doing enough to address the country’s economic contraction.<\/q><\/p>\n
Battery Metals<\/strong><\/h4>\n