Key Macroeconomic Indicators for Base Metal Prices (2015-8-19)

SHANGHAI, Aug. 19 (SMM) – Both Shanghai and Shenzhen Composite Index fell by over 6% Tuesday on fears of further yuan depreciation, re-igniting bearish sentiment again. Base metals were hence weighed down.

In Shanghai and Shenzhen Stock Exchanges, about 1,600 shares dropped by its 10 percent daily trading limit and share turnover declined to RMB 722.5 billion (USD 112.8 billion) and RMB 667.3 billion, respectively.

In China, among July’s newly built commodity housing (indemnificatory housing excluded) in 70 mid-sized and large cities, prices of 29 newly built commodity housing (indemnificatory housing excluded) dropped, 31 grew and 10 held flat, versus June’s. The People’s Bank of China launched the 7-day reverse repurchase operations with a scale of RMB120 billion on the open market on Aug. 18, and the bidder rate stayed at 2.5%. Railway freight volume for July decreased 10.9% YoY and slipped 10.2% YoY to 1.98 billion mt during January-July. The PBOC continues to inject liquidity to the market, mirroring strong pressures of economy slowdown.     

US annualized home starts for July came in at 1.21 million, the highest since October 2007. But July’s building permits slumped 16.3% MoM, the sharpest drop since July 2008. A series of upbeat economic indicators from US, including employment, retail sales, home starts and industrial output, means a strong rising momentum for Q3’s economy, boosting hope for the Fed’s interest rate hike. As a result, US dollar index increased.   

The European Central Bank cut emergency liquidity assistance (ELA) for Greece banks, a sign of stability in Greece banks. Greece debt crisis thus eased further.

US dollar index grew 0.22% whereas euro fell 0.48%. US stocks posted a drop but European stocks were mixed. LME base metals declined across the board.