Industrial metals: Recovery despite weak China data

The cyclical raw materials are not only steadfast at the beginning of the week, despite the further spread of the Covid 19 virus (especially outside of China), they are even increasing noticeably. Copper rises 1% to $ 5,700 a ton, while nickel is the biggest winner among metals in early trading, up 3% to $ 12,600 a ton. The metals are supported by strong equity markets in China - the CSI 300 rises by over 3%.

Caixin's China Manufacturing Managers' Index (PMI) fell more sharply than expected to 40.3 in February, but it was not as bad as the official PMI, which plummeted to 35.7 , This apparently gives market participants some hope this morning, which the PMI data appears to regard as a one-time shock. In contrast to the rest of the world, the situation in China is brightening again and the number of new cases is falling significantly.

The PMI data, which took into account the impact of the virus outbreak for the first time, should be an indicator of how much the Chinese economy is suffering from the virus and its measures to curb it. In two weeks, the National Bureau of Statistics will publish figures on industrial production, fixed investment and retail sales. Meanwhile, the stock-registered inventory at SHFE continued to increase in the past week, but the increase has weakened significantly compared to the previous week. With 311 thousand and 160 thousand tons, respectively, the copper and zinc stocks are at a 3-year high, while the aluminum stocks with 440 thousand tons have reached the highest level since the middle of last year.

Source: Commerzbank Research, Photo: Fotolia