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Don’t Lose Sight of China’s October Trade Data amid the Election

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China’s October trade data

Election fever is heating up as Americans digest the results of the US presidential election. Market observers closely followed the current US election. The attention isn’t surprising given the two candidates’ diametrically opposed stances on key economic issues. The elction results could drive markets’ near-term performance.

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Data were worse than expected

Amid the US presidential election, China released a very critical data point. The world’s second-largest economy released its October trade data on November 8. China’s exports in dollars fell 7.3% YoY (year-over-year) in October. Imports fell 1.9%. Previously, China’s September exports and imports fell 10.0% and 1.9%, respectively, on a YoY basis.

Although the rate of decline in exports and imports slowed down from last month, China’s October trade data were worse than expected.

Series overview

China’s trade data are especially crucial for metal investors. China is the dominant player in industrial metals from steel to copper. The impact of China’s slowdown is visible in all of the commodities.

China impacts metals in different ways. In steel and aluminum (AA), higher Chinese exports distort the global markets. Although China accounts for a small share of US steel imports, companies such as U.S. Steel (X) and AK Steel (AKS) allege that China is transshipping its steel from Vietnam to evade US duties.

China’s copper imports impact the market. The demand slowdown in China is negative for US-based copper miners (XLB) such as Freeport-McMoRan (FCX).

In this series, we’ll analyze what China’s October trade data mean for steel, copper, and aluminum investors. Let’s start by looking at China’s steel exports.

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