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Trump Rally and Chinese Data Give Metal Investors a Boost

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Chinese data

Metals have been on a roll ever since Donald Trump won the US presidential election on November 8, 2016. Trump’s proposed infrastructure plans are expected to boost the demand for metals, including steel, copper, and aluminum.

Metal prices have reversed their falling streak and have moved to multi-month highs on better demand prospects in the United States (DIA).

Since China is by far the largest consumer of most metals, you should probably keep an eye on its economic indicators.

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November trade data

On December 8, 2016, China released its November trade data. Its exports in dollars rose 0.10% year-over-year in November, and imports rose 6.7%. The figures were better than expected, which boosted market sentiment.

In October, China’s exports and imports fell 7.3% and 1.9%, respectively, year-over-year.

Series overview

China impacts metals in various ways. For 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 United States Steel (X) and AK Steel (AKS) allege that China is transshipping its steel from Vietnam to evade US duties.

China’s copper imports also 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 November trade data mean for steel, copper, and aluminum investors. Let’s start by looking at China’s steel exports.

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