Economic data suggest that China's economy is cooling, but demand for metals has been red-hot lately. Should China's economy continue to slow, demand for metals could follow suit. |
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"...analysts say the PMI survey findings suggest that pent-up COVID demand may have peaked and China's robust economic rebound from the crisis is starting to moderate."
Reuters, July 5, 2021
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Summary:
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AEGIS Thoughts & Strategies: Although we shouldn't make extreme judgments from only two economic indices, both Caixin PMI Indices suggest that China's economy has been cooling since at least last fall. Contrarily, China's appetite for metals has been strong this year, suggesting the manufacturing and services sectors are buoying demand. However, renewed COVID fears and the potential lockdowns are keeping a lid on prices. A boost in demand, perhaps related to fewer COVID disruptions, may be needed to move prices higher.
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