SHANGHAI, Oct. 18 (SMM) -- According to data from the National Bureau of Statistics (NBS), China’s GDP for Q3 was up 7.4% YoY, the seven straight quarter recording decline, and also the lowest in three years. China’s GDP growth for 1H was up 7.7% (deducting inflation), far lower from a year earlier. The steady economic decline suggests that China’s economy has not hit bottom yet.
Industrial value-added output during the first three quarters was up 10.0% YoY, 0.5 percentage points lower from the level in the first half of 2012, with value-added output from heavy industry up 9.7% YoY and light industry up 10.4%. Profits at large enterprises totaled RMB 30.6 trillion from January to August, down 3.1% YoY. Fixed-assets investment during the first three quarters was up 20.5% YoY (nominal growth). The economic data were all at relatively low levels. Generally speaking, growth of industrial output slightly falls, and enterprises profits are down. China’s economy is still under recession which shall last for a relatively long period. It is expected that the macroeconomic outlook in Q4 will not be optimistic. In order to stimulate economic growth, China’s central bank may further introduce stimulus to guarantee stable economic growth.
In overseas market, the EU summit will be held from October 18th to 19th. According to EU officials, the summit will mainly discuss the euro zone reform and unlikely sign effective agreements. It is expected that the members in the euro zone will have further discussion on the EMS, economic reform restriction mechanism and the European banking union etc, and may reach consensus on the Spanish debt issue.
Given exacerbated concern over China’s economic outlook and persistent Spanish debt issue, base metal transactions were cautious and base metal rebound was capped. SMM expects that Shanghai base metal prices will continue to hover at recent levels.