In this article, we present our chart of the week, which shows the relationship between movements in copper prices and changes in power grid investment in China.
As the chart above suggests, the year-on-year changes in power grid investment tend to lead the year-on-year changes in the LME copper price by around 18 months.
Usually, copper experts estimate it takes around 6 months for a change in power grid investment to produce an impact on actual demand for power cables and therefore copper prices. Our work shows that the spillover effects are being felt beyond