LME Industrial Metals Index: Highest level since April 2019

The LME Industrial Metals Index yesterday rose by over 1% to its highest level since April 2019. This is all the more astonishing when one considers that none of the LME industrial metals has reached a 15-month high like the index itself and most of them have even been trading in the red since the beginning of the year. The recent price increase is thus mainly due to the breadth of the recovery of all metals and could be interpreted as an indication of a general economic recovery.

Conversely, however, one could argue that the actual metal-specific fundamental developments currently play a less important role in pricing and that the price increase of over 30% since the low in March has been driven primarily by economic optimism. Yesterday, too, it was probably external factors such as the equity markets - the Nasdaq Composite set a new record yesterday - and the weak US dollar that contributed significantly to the price increase. In addition, the Manufacturing Purchasing Managers' Indices in China, Europe and the U.S. surprised on the upside for July, indicating that the industrial demand recovery is continuing.

Source: Commerzbank Research, Photo: Fotolia