Goldman Sees Metal Rally in Sight on Rerun of '08 China Stimulus
- Fixed-asset spending poised to fuel copper, nickel shortage
- Credit expands at pace “not seen since the financial crisis”
WUHAN, CHINA - APRIL 10: (CHINA OUT) A worker walks atop a pile of steel tubing at a steel product market on April 10, 2008 in Wuhan of Hubei Province, China. China's steel prices have surged 10 percent this year, and increased 23 percent in March compared with the same time last year, according to statistics from China Iron and Steel Association (CSIA). Since more steel products are required for reconstruction after the recent snow disaster and rising investment in real estate, the gap between demand and supply will be further widened.
Photographer: China Photos/Getty ImagesA rerun of China’s massive stimulus during the financial crisis is set to offer another boost to global metals prices, according to Goldman Sachs Group Inc.
Strong credit expansion has “remarkably bullish” implications for the nation’s metals-intensive industries as fixed-asset investment and manufacturing are poised to accelerate, the bank said in a report. New lending to the so-called old economy in December and January jumped by 1.1 trillion yuan ($160 billion) from a year earlier, equivalent to more than one and a half years of U.S. President Donald Trump’s mooted infrastructure package, it said.