Biden victory and good China data boost metal prices

by David Fleschen

At the beginning of the new trading week, metal prices pick up where they left off last week: they rise. Supported by very firm Asian stock markets, reflecting market participants' risk appetite after Joe Biden's election victory in the US, a weaker US dollar and a further appreciation of the Chinese yuan, copper briefly broke through the $7,000 per tonne mark this morning. Only a few dollars are still missing from the multi-year high reached just under three weeks ago. With the exception of tin, all other industrial metals are also gaining at the start of trading. Zinc and aluminum each mark 1½ annual highs. Iron ore is also becoming noticeably more expensive. In addition to the good mood, the metals are benefiting from good Chinese trade data published at the weekend.

According to data from the customs authorities, China mainly exported more goods in October, which indicates that the economy is recovering in countries outside China. Imports were lower than expected, but were still quite robust. For example, China imported 618 thousand tons of copper. Although this was almost 15% less than the previous month and the lowest quantity since May, it was over 40% more than the previous year. Imports of copper ore and concentrate were down on both the previous month and the previous year. The decline in copper imports can be attributed to several reasons: the seasonal slowdown in demand, the "Golden Week" at the beginning of the month and the rise in copper prices. As expected, iron ore imports were above the 100 million tonne mark for the fifth consecutive month, at almost 107 million tonnes. This continues to reflect the extremely high steel production in China, which is on record course.

Source: Commerzbank Research, Photo: Fotolia

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