During July, the first hint of a manufacturing slowdown appeared globally. In the past two years, the global economy has witnessed a growth momentum in service and manufacturing together. But is that momentum about to vanish?
In recent PMI reports that cover a large spectrum of industries and countries, there were hints of a reduction in activity especially in new orders and inventory purchases. The major cause of this decline was contributed by China and USA.
In the data trend, there have been some neutral to decline hints already. But for now, output remains stable while employment and supply chain issues continue.
Given such a scenario already revealed in surveys, there has been a continue inventory build-up of commodity exchanges. Within this, copper is more worrying at the Shanghai exchange because it provides a proxy for China's manufacturing growth. At the same time, it has resulted in commodity prices falling by 7-8% on average since July.
A combination of China's slowdown and Pre-festival stocking up by major companies might have already formed a peak in the sector. The data and reports of August and September are crucial to confirm the same.
Comments