China PMI Surveys Create Optimism

After enduring a difficult month through most of October, copper pricing rose at the very end of the month, reportedly based on positive economic news from China.

Two different purchasing managers’ indexes (PMI) for China for October indicate that the nation’s manufacturing activity rose to its highest level in several months.

The news may have helped copper pricing on the London Metal Exchange (LME) rise on Oct.31 and Nov. 1, helping the red metal’s three-month forward price to reach $7,765.50 per metric ton.

The PMI, calculated and released by a Chinese government agency, rose to 50.2 in October from 49.8 in September, recovering after a two-month dip, according to Reuters.

The Wall Street Journal has reported that the private-sector PMI for October released by HSBC Bank pointed to activity reaching “an eight-month high of 49.5, up from a final reading of 47.9 in September.”

According to the WSJ summary of the HSBC report, “New orders rose to 50.4 in October, from 49.8 in September, while new export orders saw improvement at 49.3, up from 48.8 in September.”

Analysts contacted by the two news agencies indicated that the improved index numbers are a sign of modest economic improvement in China, but they do not necessarily indicate a return to 9 or 10 percent annual GDP growth.