Chinese commodity traders have returned following a week-long holiday, and they’re buying.
Here’s the scoreboard after a few minutes of trade.
SHFE Copper ¥52,120 , 1.70%
SHFE Aluminium ¥16,630 , 0.85%
SHFE Zinc ¥26,885 , 3.94%
SHFE Nickel ¥85,100 , 0.95%
SHFE Rebar ¥3,755 , 4.22%
DCE Iron Ore ¥458.50 , 1.44%
DCE Coking Coal ¥1,148.00 , 2.04%
DCE Coke ¥1,981.00 , 4.26%
The gains are being led by rebar and coke futures in Shanghai which have put on over 4%, helping to underpin gains in iron ore.
Zinc futures are also soaring following substantial gains on other exchanges last week.
A strong manufacturing PMI report for September released last week, along with speculative buying ahead of the start of China’s National People’s Congress next week, likely explains the initial strength seen today.
Hinting that much of the move may be driven by the latter, Chinese stocks have also jumped out of the gate on Monday, logging substantial gains across all mainland indices.
“Would it be cynical of me to suggest we’ll see much positivity this week in Chinese financial markets before next weeks 19th national Congress?”, pondered Greg Mckenna, chief market strategist at AxiTrader, in his morning note.