Industrial Metals: No tailwind through China PMI
by David Fleschen
The manufacturing PMI, published this morning in China, rose slightly faster than expected in July, but remained below the 50 mark for the third consecutive month, indicating expansion. The mood among the big state companies in China is therefore still not good. Accordingly, the PMI does not succeed in dispelling the growth concerns of market participants and giving metal prices a tailwind. These recover only marginally from their losses yesterday morning. Copper is trading at $ 5,960 per ton, aluminum is trading at just over $ 1,800, and zinc is priced at $ 2,450. Yesterday, the Chinese Politburo met for an assessment of the first half of the year. It also has the view forward. The leadership acknowledged downside risks to the economy and committed to a proactive fiscal policy while maintaining an adequate monetary policy. However, notable economic stimulus measures were adopted. The state government has even explicitly refrained from taking measures in the short term to support the real estate sector, since real estate is intended for living and not for speculation. Meanwhile, trade talks between the US and China resumed. However, the meeting of high-level representatives of both sides in Shanghai should not bring any significant progress. After all, the mood is supposedly good, although US President Trump has scolded again via Twitter over China.
Source: Commerzbank Research, Photo: Fotolia