FXStreet (Mumbai) – As reported by Reuters, Chinese importers using bonded copper stocks as collateral for short-term dollar loans face rising costs after the unexpected depreciation of the yuan, potentially forcing smaller firms to give up metal to banks for resale in the coming quarter.
China’s yuan has declined roughly 4% so far this week and hit a four-year low, following second round PBOC led yuan devaluation on Wednesday.
People in the industry said the risk of copper being dumped could hit future imports, piling more pressure on international markets already grappling with oversupply and slowing economic growth in China, the world’s top metals consumer.
Meanwhile, copper futures on Comex extend recovery from fresh six-year lows reached at 2.293 levels in late Asian trades and now trade at 2.329.
(Market News Provided by FXstreet)