Official Chinese government data showed that China’s industrial production slowed, but not as badly as analysts had expected. While inflation quickened in line with analysts’ expectations.
As a result, prices for copper and oil went up after two days of losses.
Copper for three-month delivery was up on the LME today to $8993.50 after closing at $8896.50 on Monday. Crude oil was up to $97.59 a barrel on the New York Mercantile Exchange after dropping to $96.55 before the data was released.
Baring Asset Management head of multi-asset strategy Khiem Do, who is based in Hong Kong, said: “Most sensible investors know China will continue to grow. At this point in the economic cycle, where China is experiencing bottle necks in the production of food stuffs and energy, a moderate slowdown is good news.”
Industrial production in China slowed slightly, rising 13.3 per cent from a year earlier in May, down from the 13.4 per cent in April, but above expectations of a 13.2 per cent rise.
Inflation rose rapidly to 5.5 per cent in May, with this being blamed on increasing food prices in the country. However, data also showed that bank lending was reducing, with Chinese government officials believing that the four interest rate rises in recent months in the country are having an effect in cooling the economy, and that inflation will fall to more stable levels as a result.