wholesale jewelry sites Will the devaluation of the renminbi stimulate the price of domestic commodities?

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Ifly affected by the slowdown in China's demand, the prices of copper and iron ore have fallen sharply. However, traders said that the recent depreciation of the renminbi has also exacerbated the decline in these two commodities. China is the world's largest copper and iron ore importer.
Due to the exhaustion of traditional domestic financing channels, some companies use imported copper and iron ore as loan mortgages, and the decline of the renminbi has hit such enterprises. For borrowers and lenders, the risks of this financing method are continuously increasing, which also puts further pressure on the slowdown of the Chinese economy.
Tuesday, driven by the depreciation of the renminbi, the price of copper continues to fall, refreshing the 7 -month low. On the Shanghai Futures Exchange, the closing of the Bronze Democratic contract of the benchmark in March fell 2.1%to RMB 46,250 per ton (about $ 7,532). When the Chinese market closed, the copper period of the London Metal Exchange fell slightly to $ 6,677.75 per ton.
Inned data from the Steel Index (The Steel Index), this week's Tianjin Port [-9.97%fund research report] 62%taste the imported iron ore benchmark price fell by 8.3%. $ 104.90. The benchmark price hit the lowest level since October 2012, and has fallen 11%since early March.
Eongan Futures senior analyst Chao Jin said that although the real reason behind the decline in commodity prices is the slowdown in the Chinese economy, the recent depreciation of the RMB has given those who cannot find other financing channels and can only use copper financing. Those who came to raise funds brought a lot of pressure.
The companies use copper and iron ore as a financing collateral. Copper financing activities in the past five years are particularly rampant in China. In a typical copper financing activities, enterprises use copper as loan mortgages, use the funds raised as operating capital, or for higher returns and more speculative investment activities. Enterprises like small real estate developers are difficult to obtain loans from banks, so they usually import copper from overseas in US dollars and then store them in China for RMB loans.
If the price of copper rises or keeps stable, the company can sell copper at high, profit from it, and sell the income to repay the loan. But if the price of copper falls, the borrower will face risks.
If depreciation of the RMB, such funds are not affected as companies operating capital, but those borrowers who use copper financing may be discouraged, which will promote them to sell copper and promote the lower copper price.
Following the cumulative appreciation of 2.9%last year, the Cumulative RMB has fallen by 1.4%since this year, a large decline.
jin said that due to the significant decline in copper prices, Chinese banks began to reduce the relevant business, which further deteriorated the situation. As the bank accepts copper as a mortgage, companies that need financing have to find other ways, so copper imports for financing purposes are expected to decline.
The managers of Australia Mining Company Bhp Billiton LTD. and Rio Tinto PLC acknowledged similar problems on Tuesday, and expressed their concerns about the tightening of China's credit conditions and the trend of inventory increases. Promote the market decline.
The above comments have further proved that the problem of China's financial system is spreading to the real estate and banking industry (the most sensitive representative industry tightening of credit), and it is influenced on overseas economies.
Barclays analyst Cheng Ximing said that these factors may provide opportunities for people to reduce the copper price of the London market. He refers to the recent decline in international copper prices.

It in China, many analysts have seen copper prices recently as a long -term chasing trend. Due to the slowdown in the domestic economy, the prices of commodities such as natural rubber have fallen for a long time.
jin said that the price of copper and natural rubber in the Shanghai market has always had a high correlation, but last year, the trend was deviated, and the decline in natural rubber was much larger. He added that the demand for copper financing is a key factor in supporting copper prices in the past year.
The copper price of Shanghai Futures Exchange fell 18%last year, while the price of natural rubber fell 35%.
jin said that it was not until recently that the difficult situation of copper empty has improved.
Although the original copper market attracted much attention, as the copper price began to fall last Friday, investors' attention was transferred to a larger iron ore market.