It has been about 48 hours since the 3rd quarter GDP number released. Let’s take a look at how the market reacted to the 6.9% print.
The Changjiang aluminium price opened at RMB 11,160on Monday, down 10 yuan since last Friday. This morning, the Changjiang price is at RMB 10,730, the lowest since January 2009. The price of aluminium is down but the Shanghai stock market is up slightly while London closed last night at $1,506.5, a $36 loss of since Friday.
The aluminium price has gone down RMB 390 in the space of less than 2 days. That’s about US$60/t.
The 3rd quarter GDP of 6.9% is at the high end of estimates, and some say the result was intended to deliver a message of confidence to the Chinese people. However, sentiment seems low and people are worried about the economic conditions. Since the aluminium usage is corresponding to GDP growth, demand will be weak as well.
We also want to point out, the real estate industry didn’t perform well and dropped 2.0% YoY; the service sector grows the fastest but services industries demand less metal.
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