Chinese copper exports are bad news for Chile

China is about to begin exporting copper, which is bad news for copper miners (COPX, quote) and worse news for BHP Billiton (BHP, quote) and the country of Chile (ECH, quote).

Image courtesy CTD 2005: http://www.everystockphoto.com/photographer.php?photographer_id=9543According to the Financial Times, copper inventories are at “record levels,” and China’s largest producer of copper has announced a plan for “large” exports in the next few weeks.

China is the world’s largest consumer of copper, so if it has too much, the surplus is sure to depress prices.

The invisible hand of the market has already smacked down the share prices of BHP Billiton and the copper-dominated iShares MSCI Chile Investable Market Index ETF. ECH is down 3.61% over the last month, and BHP Billiton has also fallen in recent trading. 

Over the last year, BHP Billiton is down 21.57%. 

China has never been shy about manipulating the copper market, and it may not actually follow through with the announced exports. 

But judging from the share price declines for BHP Billiton and the ECH in recent action, the market expects the supply of copper to increase.

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