Copper prices hit a record, as the seemingly relentless pace of Chinese demand and a potential supply shock from Chile bring the industrial metal's near-term scarcity into stark relief.
China, the world's No. 1 consumer of the red metal, released data showing that industrial output and capital spending were holding steady even though Beijing has recently taken steps to cool investment in real-estate and other sectors.
There is an increasing amount of information coming from China that may thwart this upward move in commodities purchased by the Chinese industrial base. The big one is inflation:
China's consumer price index rose 4.4% from a year earlier in October, as food prices drove the fastest increase in two years. Price rises accelerated sharply from the 3.6% increase in September and beat market expectations of a 4% gain. Average inflation for the year has now reached 3% and is likely to march higher unless the readings slow sharply in the next two months.
This has a lot of people concerned that we'll see the Chinese central bank raise rates soon.