MORNING VIEW: Base metals prices supported by better PMI data in China

The markets are surprisingly upbeat this morning, Monday September 30, due to improvements in Chinese manufacturing purchasing managers’ index (PMI) data, offsetting reports the White House is looking at the possibility of preventing Chinese companies from listing in the United States, which will no doubt raise the rhetoric over trade talks.

  • China’s Caixin manufacturing PMI climbed to 51.4 from 50.4, while the official manufacturing PMI rebounded to 49.8 from 49.5. 
  • Equities in Asia are mainly lower, led by a 0.78% fall in China’s CSI 300 Index.

Base metals
Three-month base metals prices on the London Metal Exchange were up across the board this morning, led by 0.8% gains in nickel and lead, with the rest up between 0.1% for aluminium and 0.5% for copper that was recently quoted at $5,791 per tonne.

In China, the most-traded base metals contracts on the Shanghai Futures Exchange were for the most part firmer, led by a 0.8% gain in copper’s November contract to 47,220 yuan ($6,623) per tonne. January tin was the one bucking the trend with a 1% decline to 134,670 yuan per tonne.

The spot copper price in Changjiang was up by 1.2% at 47,180-47,410 yuan per tonne and the LME/Shanghai copper arbitrage ratio was at 8.2, compared with 8.1 a week ago.

Precious metals
The spot gold price has been testing recent support again and was recently quoted at $1,491 per oz, the recent low was $1,483.55 – a break below this would look ominous since as there is quite a head-and-shoulder pattern on the chart. Silver, recently at $17.36 per oz, has breached recent support, platinum is following gold’s lead, while palladium continues to push ahead with its advance into uncharted territory.

Wider markets
Spot Brent crude oil prices are in decline again and were recently quoted at $60.96 per barrel, down from $64.82 per barrel a week ago.

The yield on benchmark US 10-year treasuries has pulled back further – it was recently quoted at 1.6837% compared with 1.7596% a week ago. The German 10-year bund yield has also weakened again and was recently quoted at -0.5700%, compared with -0.5200% a week ago.

Asian equities were for the most part weaker on Monday: The Nikkei (-0.56%), the CSI 300 (-0.78%) and the ASX 200 (-0.41%), with the Hang Seng (+0.54%).

This follows a mixed performance in Western markets on Friday, where in the US, the Dow Jones Industrial Average closed down by 0.26% at 26,820.25; in Europe, the Euro Stoxx50 closed up by 0.39% at 3,545.88.

Currencies
The dollar index is holding up in high ground and was recently quoted at 99.07, trading just below the early September multi-year peak at 99.38.

While the dollar is strong, the other major currencies are mixed: the euro (1.0983), the Australian dollar (0.6755) and the yen (107.80). Sterling (1.2306) is showing some weakness because Brexit talks remain deadlocked.

Key data
Monday’s economic agenda is busy, in addition to the Chinese PMI data mentioned above, there is data on German retail sales, consumer price index data out of Spain, Germany and Italy; Germany, Italian and EU unemployment data, lending and GDP data out of the United Kingdom, and Chicago PMI out of the US.

Today’s key themes and views
With the exception of aluminium and tin prices that are heading lower, base metals prices are stuck in sideways ranges and until more is known about the US/China trade talks, we expect more of the same. With China on holiday for the rest of the week until next Monday for the National Day celebrations, liquidity is likely to be thin and therefore the market may become more volatile should any news break.

Gold prices have been consolidating at lower levels and look vulnerable, so we wait to see if support holds. Given high level trade talks lie ahead and there has been a pick-up in rhetoric ahead of the talks, now may not be the time for a correction. We think this will be a case of waiting for the market to show its hand.

What to read next
The US aluminium industry is experiencing challenges related to tariffs, which have contributed to higher prices and premiums, raising questions about potential impacts on demand. Alcoa's CEO has noted that sustained high prices could affect the domestic market. While trade agreements might provide some relief, analysts expect premiums to remain elevated in the near term. However, aluminum demand is projected to grow over the long term, supported by the energy transition and clean energy projects. To meet this demand, the industry will need to increase production, restart idle smelters and address factors such as electricity costs and global competition.
Read Fastmarkets' monthly base metals market for May 2025 focusing on raw materials including copper, nickel aluminium, lead, zinc and tin.
The Mexico Metals Outlook 2025 conference explored challenges and opportunities in the steel, aluminum and scrap markets, focusing on tariffs, nearshoring, capacity growth and global trends.
China has launched a coordinated crackdown on the illegal export of strategic minerals under export control, such as antimony, gallium, germanium, tungsten and rare earths, the country’s Ministry of Commerce announced on Friday May 9.
Fastmarkets proposes to amend the frequency of Taiwan base metals prices from biweekly to monthly, and the delivery timing for the tin 99.99% ingot premium from two weeks to four weeks.
The US-China trade truce announced on May 12 has brought cautious optimism to China’s non-ferrous metals markets, signaling a possible shift in global trade. Starting May 14, the removal of additional tariffs has impacted sectors like battery raw materials, minor metals and base metals such as zinc and nickel, with mixed reactions. While the improved sentiment has lifted futures prices and trade activity, the long-term effects remain unclear due to challenges like supply-demand pressures and export controls.