Weak data from China initially do not affect metal prices
by David Fleschen
Metal prices are rising slightly, although negotiations on the partial agreement in the US-China trade dispute falter and Chinese economic data are all weaker. China appears reluctant to include a specific figure in the agreement for the purchase of US agricultural products, as the US is failing to meet China's demand to lift its punitive tariffs. In addition, the Chinese economy remains shaky, which can be seen, for example, in the weak retail sales in October. Also, industrial production and investment were well below expectations, according to National Statistics Bureau (NBS) data last month. At the beginning of the week, the Chinese central bank had reported weak lending. In the eyes of many market participants, however, these data appear to be nothing new and just confirm the trend of a slowing Chinese economy. The LME industrial metal index fell to a 4-week low yesterday, giving up all profits since the partial agreement was announced in the trading dispute.
For the first time in nearly two years, China's steel production fell in comparison with the previous year in October according to data from the NBS. With "only" 81.5 million tons, it has also marked its lowest value since March. However, in early October, China's markets were closed for a week due to the "Golden Week" and the People's Republic's 70th anniversary, and economic activity was largely halted. Chinese steelmakers also faced lower profitability in October.
For the first time in nearly two years, China's steel production fell in comparison with the previous year in October according to data from the NBS. With "only" 81.5 million tons, it has also marked its lowest value since March. However, in early October, China's markets were closed for a week due to the "Golden Week" and the People's Republic's 70th anniversary, and economic activity was largely halted. Chinese steelmakers also faced lower profitability in October.
Source: Commerzbank Research, Photo: Fotolia