SHANGHAI, Jun. 23 (SMM) – HSBC’s China manufacturing PMI for June released early today hit a three-month high at 49.6, with the new order index standing above 50 for the first time in four months. Will there be a strong rebound in copper prices following the upbeat releases?
“The increased PMI, especially improving new orders index, indicates stabilizing of the economy, and will lend some support to copper prices,” analyst from Everbright Futures told SMM, “this plus the large spot premiums in China will help copper prices level out.”
Nevertheless, some analysts noted that any rise in the red metal will be slight.
“Copper prices will benefit from the positive data in the short term, particularly after continuous declines, but we see the rebound to be a marginal one” said analyst from Western Futures.
“Despite an uptick, the PMI remains below 50, which we believe was not a strong evidence for any real turnaround in the economy,” the analyst explained.
“What’s worrisome is that demand for nonferrous metals remains unimproved,” analyst of Guosen Futures added, “slipping housing starts in China and excess inventories in other copper consuming sectors, such as home appliance, will block the increase in prices.”
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