FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
FxPro information and reviews
HFM information and reviews

China to flood the commodities market, mining companies plumb the depths

18 June 2021

The Chinese government is at it again, manipulating the markets under a thinly veiled propaganda-infused ruse that measures needed to be taken to protect consumers from high prices. In straight-forward terms, that means that an attempt to crash the share prices of large publicly listed mining companies in the free-market world has been successful, with the Chinese Communist Party saying that it is all for everyone's own good.

The price of raw materials, and of precious metals, had been rising globally, a trend reflected in the last few weeks' data from major commodities exchanges across Europe, North America, Australia and Hong Kong, four major regions in which commodities markets are key components of the financial markets structure.

China, a country whose government's ideology, and system does not align with nor approve of the diversified market economies of the non-communist world, has a unique method of controlling markets in a way that its own industry sectors, most of which are owned by the state, can benefit. Quite simply - crash the commodities market to stop the boom, then buy the raw materials for cheap, hence reducing construction and infrastructure development costs and outstrip all nations in industrial and commercial output. Easy? Very

As easy as reporting via the state news agency, via which China's government put out a report that it would release some of its stockpiles of copper, aluminium, and zinc, with the official line being that this move is necessary in order to stabilise the surging market in raw materials and prevent higher prices being passed onto customers. How thoughtful...

Oversupply, or at least the potential thought that there could be oversupply, is often a driver of downward markets and this is no exception. Mining companies which are listed on public exchanges in Western nations are now heading down. Anglo American stock has fallen by 1.2% which equates to 35.3p, and now languishes at 2963.5p, Glencore has dropped by by 1.2%, and Chilean copper group Antofagasta by 1% to 1454p.

These are all operating in areas in which China has an infrastructure development interest, hence reducing the cost of materials and lowering the competition's advantage and giving China's government a significant advantage in obtaining what it needs for its large-scale projects. At the same time copper floundered, falling to the lowest level in around two months, trading 4% lower at $9,569.50 a ton. Unsurprisingly, this weighed on the FTSE 100 mining firms, the prices of zinc, tin and aluminium have now all dropped.

Once again, the possibility of influencing massive and well-developed markets can be done via the media, however this time it is not the Reddit disruptors, it is the most industrially advanced and powerful government in the world.

Risk warning: Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.5% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets or CFDs work and whether you can afford to take the high risk of losing your money.
Authorised and regulated by the Financial Conduct Authority, with Firm Reference Number 124721.



The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

31 Oct 2022

XAU/USD juggles around $1,710 as investors await US NFP
XAU/USD juggles around $1,710 as investors await US NFP

Gold price (XAU/USD) is displaying topsy-turvy moves in a narrow range of $1,709.35-1,713.42 in the early European session. The precious metal is displaying a lackluster performance...

7 Oct 2022

Positive mood stalls on the “pivot” trade
Positive mood stalls on the “pivot” trade

USD slid against most of its major peers. The DXY closed a tick above its lows of 110.05. Resistance is at 110.76 while next support is 109.29. GBP gained for a sixth session in a row, a winning streak not seen since April 2021...

5 Oct 2022

OctaFX glances at current economic shifts - the good, the bad, and the strange
OctaFX glances at current economic shifts - the good, the bad, and the strange

Pandemics and health crises, political tensions, geopolitical tension flashpoints popping up, Western sanctions on significant European and Asian economies, and grave tensions between...

3 Oct 2022

The Euro rebounded from the low
The Euro rebounded from the low

After updating its multi-year lows again, the major currency pair rebounded. The current quote for the instrument is 0.9656. Last night, the local interest in risks improved a bit, helping the asset to successfully correct...

29 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back...

28 Sep 2022

Editors' Picks

IronFX information and reviews
FXCM information and reviews
NordFX information and reviews
MultiBank Group information and reviews
MultiBank Group
Vantage information and reviews
FP Markets information and reviews
FP Markets

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.