Metal Prices Fluctuate at High Levels on Expansion of Manufacturing Sector -Shanghai Metals Market

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Metal Prices Fluctuate at High Levels on Expansion of Manufacturing Sector

Data Analysis 11:32:42AM Mar 01, 2012 Source:SMM

SHANGHAI, Mar. 1 (SMM) - Investors concerns eased due to news that China's manufacturing data released today continued to expand while European central bank will provide low-cost loans to the banking sector. In this context, metal prices should continue to rebound.

China's official PMI in February rose from 50.5 in January, to 51.0, in line with market speculations. New order index was 51.0%, up 0.6% compared to last month; the production index was 53.8%, up 0.2% from last month; the import index and new export orders increased remarkably. The rising PMI is expected to further ease market concerns over China's slow economic growth, while improving manufacturing industry shows China's economic recovery is faster than expected, which will positively affect demand for metal. The improving Chinese manufacturing industry will boost global commodity demand.

The US Federal Reserve's Chairman Bernanke stated on February 29th that it is reasonable to continue monetary stimulus policies, but rising energy prices will likely cause the inflation rate to increase whilst the speed of decrease in unemployment rate will be faster than expected. According to Bernanke, the Fed is likely to lower quantitative easing policies. The LTRO2 ended this week, receiving demand of EUR 529.531 billion, more than expected. A total of 800 banks applied for loans in the operation, with the demand EUR 470 billion more than expected and also higher than in the LTRO last December. European central bank hopes that the unlimited and long term liquidity operation with ultra low interest rates should help ease the tightness of credit loans in the banking sector and cope with the liquidity crisis. The refinancing plan by the European central bank gave confidence to the market.

The market is focusing on the US non-farm data to be released on Friday. Concerns over weakening consumption will ease if the data turns out to be positive, which will further drive up nonferrous metal prices.
 

Price

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Aluminum Ingot
Jul.19
13920.0
70.0
(0.51%)
Aluminum Ingot - Fo Shan
Jul.19
13910.0
80.0
(0.58%)
Aluminum Ingot - Wu Xi
Jul.19
13905.0
65.0
(0.47%)
Aluminum Ingot - Hang Zhou
Jul.19
13930.0
70.0
(0.51%)
Aluminum Ingot - Chong Qing
Jul.19
13900.0
60.0
(0.43%)

Metal Prices Fluctuate at High Levels on Expansion of Manufacturing Sector

Data Analysis 11:32:42AM Mar 01, 2012 Source:SMM

SHANGHAI, Mar. 1 (SMM) - Investors concerns eased due to news that China's manufacturing data released today continued to expand while European central bank will provide low-cost loans to the banking sector. In this context, metal prices should continue to rebound.

China's official PMI in February rose from 50.5 in January, to 51.0, in line with market speculations. New order index was 51.0%, up 0.6% compared to last month; the production index was 53.8%, up 0.2% from last month; the import index and new export orders increased remarkably. The rising PMI is expected to further ease market concerns over China's slow economic growth, while improving manufacturing industry shows China's economic recovery is faster than expected, which will positively affect demand for metal. The improving Chinese manufacturing industry will boost global commodity demand.

The US Federal Reserve's Chairman Bernanke stated on February 29th that it is reasonable to continue monetary stimulus policies, but rising energy prices will likely cause the inflation rate to increase whilst the speed of decrease in unemployment rate will be faster than expected. According to Bernanke, the Fed is likely to lower quantitative easing policies. The LTRO2 ended this week, receiving demand of EUR 529.531 billion, more than expected. A total of 800 banks applied for loans in the operation, with the demand EUR 470 billion more than expected and also higher than in the LTRO last December. European central bank hopes that the unlimited and long term liquidity operation with ultra low interest rates should help ease the tightness of credit loans in the banking sector and cope with the liquidity crisis. The refinancing plan by the European central bank gave confidence to the market.

The market is focusing on the US non-farm data to be released on Friday. Concerns over weakening consumption will ease if the data turns out to be positive, which will further drive up nonferrous metal prices.