Industrial metal prices fall despite good mood in the financial markets
by David Fleschen
Despite a good mood in the financial markets, which was reflected in further rising stock markets, and despite good US economic data - industrial production rose more strongly than expected in June - industrial metals prices fell noticeably yesterday. The decline continues this morning, although good data was also reported from China. According to the National Bureau of Statistics, GDP growth in Q2 was significantly better than expected at +3.2% yoy. This means that China's economy has recovered quickly from the Corona-related slump in the first quarter.
The June data also published confirm the upward trend at least for the manufacturing sector: industrial production rose by 4.8% year-on-year. Fixed capital formation was still down by 3.1%, but in February, the peak of the crisis in China, the decline was still 24.5%. A few days ago, market participants would have used this data and news to buy metals and thus drive prices ever higher. This morning, however, they are not providing support, let alone a boost, to metal prices. At the start of trading, all metals are showing negative figures. Copper falls 1% to $6,330 per tonne, while nickel and aluminium are seeing bigger losses. After the strong rise in recent months, the price decline could be due to profit-taking, especially since the rise was recently also driven by speculation and overheated.
Source: Commerzbank Research, Photo: Fotolia