We’re all well aware of China’s voracious commodities demand growth, but U.S. demand has rebounded into a… well you know the shape:
Alan Heap at Citi:
The first evidence of a recovery in US demand is appearing. Copper service centre shipments increased 9.5%yoy, 4%mum in February; off a low base, but the first positive data point since early 2006. (Figure 14). Aluminium orders rose 25%yoy, 12%mum in March (Figure 28). Orders are a good (although not infallible) lead indicator of shipments.
There could even be good news coming out of Europe, for commodity bulls:
Europe still the laggard — But even here there are tentative positive signs. Copper merchant premia have increased 40% in recent weeks after a steady decline from mid 2009 (Figure 15). Aluminium premia are also higher (Figure 29) although this also reflects supply tightness due to illiquid stocks.
Thing is, if China encounters a major slow-down then it really won’t matter whether U.S. or European demand is back or not. Thus ultimately, commodities remain pretty dependent on that Eastern nation.
(Via Citi, Commodities Heap, 16 April 2010)
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