China data boost metal prices

Surprisingly good manufacturing PMIs in China in September helped metal prices make a positive start to the week. Copper is rising to $ 5,800 a ton, and zinc may break some of the $ 2,300 mark. Although the official PMI still remains below the 50 mark despite a 49.8 rise, it indicates expansion. Caixin's PMI, however, jumped to 51.4, the highest level in over a year and a half. So sentiment in Chinese industry has improved recently, which we attribute to hopes for progress in the US trade dispute. Next week in Washington to be negotiated again. However, we do not expect a big litter, especially as the US administration allegedly plans to limit US investment in Chinese companies and limit their access to the US capital market. In the run-up to the trade talks, the metal markets should be more calm, because in China tomorrow, the markets will be closed for a week due to the celebration of the 70th anniversary of the People's Republic.

Aluminum is recovering lightly this morning to $ 1,740 a ton, after falling temporarily to $ 1,720 on Friday, its lowest level since January 2017. We have said on several occasions that the fundamental picture for aluminum has deteriorated. Contributing to this is the continuing high level of global production as well as the repeated downward revision in demand growth. We see little room for aluminum for higher prices.

Source: Commerzbank Research, Photo: Fotolia