Metal markets are stuck between the US and China

Yesterday the National People's Congress in China came to an end. Prime Minister Li Keqiang assured in a press conference that China's economy would remain on a stable course. He also stated that the government still has reserves in its fiscal, monetary and economic policies to intervene in a supportive manner. The economic stimulus package announced at the beginning of the congress in the amount of 5.5 trillion CNY 5.5 trillion (equivalent to 5.5% of GDP) announced at the beginning of Congress had disappointed market participants' expectations. These amounted to up to 10 trillion CNY. CNY. At the end of the party meeting, the delegates passed the controversial National Security Law for Hong Kong.

US President Trump had already announced that sanctions would be imposed on China in this case. Today he wants to hold a press conference on China. The growing tensions between the US and China in the wake of this overall situation could shake the already fragile trade agreement between the two countries. Then protectionism would probably regain the upper hand in terms of trade policy. Experts see this outlook negatively for metals and as a possible reason for a price setback. At present, however, the hope of a recovery of the global economy seems to predominate among market participants, now that corona measures are being relaxed in more and more countries. However, experts believe this optimism is premature, as economic data will deteriorate significantly before improving again. In addition, almost all metal markets are in a supply surplus, which is being completely ignored by market participants.

Source: Commerzbank Research, Photo: Fotolia