3 October 2023 – The Chinese economy continued to stabilise in September 2023. This is shown by the latest PMI data for the manufacturing and service sectors in China. Aluminium stocks continued to fall due to stable and growing demand from China.
China’s economy continues to stabilise in September
The Chinese economy continued to stabilise in September. With a Purchasing Managers Index (PMI) of 50.2, Chinese economic data for the manufacturing sector actually exceeded analysts’ expectations for September. The non-manufacturing PMI also rose to 51.7 in September, pointing to further growth.
Chinese economy recovers
The manufacturing PMI and strong industrial profits figures suggest that the Chinese economy is gradually recovering. Government support is likely to continue for a while and will probably be extended to reach the set target of 5% economic growth this year.
Sustained aluminium demand from China drives prices
Aluminium prices hit five-month highs on Monday as the market factored in robust demand in China, the main consumer country, falling stockpiles at exchanges and stronger activity in the Asian country’s manufacturing sector.
LME aluminium stocks down sharply
In LME-approved warehouses, aluminium stocks have fallen 17% since June and more metal is set to leave the LME system, as shown by cancelled warrants – material scheduled for delivery – accounting for 64% of total stocks.
Aluminium demand driven by economic growth
Also supportive was the expansion of China’s manufacturing sector in September, which was slower than in August but underpinned expectations that the world’s largest consumer of industrial metals would stabilise.
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