Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  SHANGHAI STOCK EXCHANGE  >  Jiangxi Copper Co Ltd    600362   CNE0000019P0

News SummaryMost relevantAll newsSector newsTweets 

Jiangxi Copper : Inflation picks up to multi-year highs in China as central bank eyes tighter policy

share with twitter share with LinkedIn share with facebook
share via e-mail
02/14/2017 | 12:17pm CEST
A vendor arranges vegetables at a market in Beijing

China's producer price inflation picked up more than expected in January to near six-year highs as prices of steel and other raw materials extended a torrid rally, adding to views that global manufacturing activity is building momentum.

China consumer inflation also rose more than expected, nearing a three-year high as fuel and food prices jumped, data showed on Tuesday.

Much of the pick up in consumer prices was likely due to higher food and travel costs heading into the long Lunar New Year holiday, the National Bureau of Statistics (NBS) said.

But mounting price pressures in China and many other countries have sparked talk of tighter monetary policy this year, after years of super-loose settings aimed at reviving economic growth.

China's central bank raised short-term interest rates in recent weeks as it looks to contain risks from an explosive growth in debt, while India's central bank last week unexpectedly signaled an end to its longest easing cycle since the global financial crisis, citing inflation risks.

Some analysts, however, believe the ramp up in price pressures in China may be short-lived, noting that a jump in January food prices was likely seasonal and that producer price gains slowed by half on a month-on-month basis.

"We don't expect such high rates of inflation to last," Capital Economics China economist Julian Evans-Pritchard said in a note.

"Tighter monetary policy, slowing income growth and cooling property prices should keep broader price pressure contained over the medium-term," he added, noting that weak prices early last year may have exaggerated the strength of a reflationary trend seen in recent months.

Consumer inflation quickened to 2.5 percent in January from a year earlier, the highest since May 2014.

But it is still well within the government's comfort zone of 3 percent, and is showing few signs yet that the jump in producer prices is filtering through to the broader economy, analysts say.

Analysts polled by Reuters had predicted the consumer price index (CPI) would rise 2.4 percent, after a 2.1 percent gain in December.

Food prices, the biggest component of CPI, rose 2.7 percent in January, led by a 7.1 percent increase in the price of pork.

Fuel costs surged 16.5 percent on-year, the biggest increase among CPI components, likely due to a low comparison in the year-ago period when fuel prices fell.

Capital Economics expects consumer prices to rise only 2.0 percent this year.

Producer price inflation accelerated to 6.9 percent -- the fastest since August 2011 -- from December's rise of 5.5 percent.

Gains in the producer price index (PPI) were driven by a 31.0 percent increase in mining costs as coal prices rise, the biggest jump in that category since early 2010.

The market had expected producer prices to rise 6.3 percent on an annual basis.

But on a monthly basis, they only rose 0.8 percent, down from December's 1.6 percent gain.

China's massive imports of coal, crude oil, iron ore and industrial materials have helped fuel a sharp rebound in global resources prices in recent months, boosting profits for producers and processors.

Iron ore futures in China rose for a sixth session in a row on Tuesday, hitting their highest in more than three years, while London copper futures have climbed to around 20-month highs.

Price gains in China have been further amplified by government efforts to reduce industrial overcapacity.

Investors are cashing in on the global reflationary trade. Shares of Jiangxi Copper Co Ltd, China's biggest integrated copper producer, have surged over 60 percent in the past year in Shanghai and 85 percent in Hong Kong.

But heady increases in China's commodity futures market, especially for iron ore, metal reinforcing bars and coking coal used in steel production, have added to policymakers' worries about speculative price bubbles.

Worries about speculation and debt risks led the central bank to move to a tightening bias in recent months, not inflation, analysts say.

"Inflation is not the main driver of monetary policy at the moment...I do think they are going to tighten more this year, but the main driver is credit risk and concerns of leverage and what's going on in the property market," said Capital Economics' Evans-Pritchard.

Banks in some big Chinese cities have started to reduce discounts on mortgage rates for first-time home buyers, newspapers have reported, joining recent steps to curb financial risks stemming from years of loose credit conditions.

(Reporting by Beijing Monitoring Desk and Elias Glenn; Editing by Kim Coghill)

By Elias Glenn

share with twitter share with LinkedIn share with facebook
share via e-mail
04/24 BQE WATER : Reports 2016 Year End Results
04/10 JIANGXI COPPER : tips 1Q net profit to grow 140-160%
02/28 JIANGXI COPPER : unit Kangxi Copper suspends production
02/14 JIANGXI COPPER : Inflation picks up to multi-year highs in China as central bank..
01/25 JIANGXI COPPER : expects annual net profit up 40-60%
01/09 PENGXIN INTERNATIONAL MINING : Int'l Mining Ties up with Jiangxi Copper
2016 JIANGXI COPPER : controlling holder no plans to sell stake
2016 PENGXIN INTERNATIONAL MINING : Int'l Mining Ties up with Jiangxi Copper
2016 FREEPORT MCMORAN : Jiangxi Copper to Reduce Copper TC/RCs by 5%
2016 JIANGXI COPPER : 9-month net down 19.6% to Rmb988m
More news
Sector news : Copper Ore Mining
05/24 HINDUSTAN ZINC : Vedanta Resources full-year core profit rises less than expecte..
05/11 Results, downgrades keep FTSE under pressure
04/28 FTSE in biggest one-month fall since November
04/26 ANTOFAGASTA : posts higher first quarter output, 2017 guidance unchanged
04/21 FTSE edges down, scores worst week in over five months
More sector news : Copper Ore Mining
News from SeekingAlpha
05/10 Sifting The Price Difference Between A Shares And H Shares (AH Premium) For V..
Financials ( CNY)
Sales 2017 213 983 M
EBIT 2017 3 456 M
Net income 2017 1 938 M
Debt 2017 1 854 M
Yield 2017 1,51%
P/E ratio 2017 27,46
P/E ratio 2018 25,60
EV / Sales 2017 0,22x
EV / Sales 2018 0,21x
Capitalization 46 008 M
More Financials
Duration : Period :
Jiangxi Copper Co Ltd Technical Analysis Chart | 600362 | CNE0000019P0 | 4-Traders
Full-screen chart
Technical analysis trends JIANGXI COPPER CO...
Short TermMid-TermLong Term
Technical analysis
Income Statement Evolution
More Financials
Mean consensus HOLD
Number of Analysts 12
Average target price 14,0  CNY
Spread / Average Target -8,3%
Consensus details
EPS Revisions
More Estimates Revisions
Zi Ping Long General Manager & Vice Chairman
Bao Min Li Chairman
Qing Wen Hu Chairman-Supervisory Board
Cheng Jiu Gan Co-Secretary, CFO & Executive Director
Xiao Xiong Fan Chief Engineer
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
VEDANTA LTD--.--%13 382
More Results