By: Natalie Scott-Gray, Senior Metals Demand Analyst, EMEA and Asia region
China's economy posted weaker year-to-date readings for GDP, industrial production and retail sales, while property sales and fixed asset investment fell at a deepening pace. China base metals demand now rests on a policy floor rather than a recovery, as Beijing's support measures aim to stabilize growth without reviving the construction activity that drives metals consumption. That matters across the base metals complex, because China is its largest market. High energy, freight and raw material costs, along with a tightening bias at the Federal Reserve and the European Central Bank, leave little room for demand to surprise elsewhere.
Natalie Scott-Gray, StoneX Senior Metals Analyst EMEA & Asia, has more than 12 years of experience analyzing metals markets and covers LME base metals and battery materials across EMEA and Asia. Her work tracks copper, zinc, aluminum and nickel, along with the supply and demand data that link Chinese consumption to prices across the complex.
China has announced a broad range of policy measures covering consumption, investment, housing, mortgage lending, developer financing and liquidity support, yet the package is built to steady base metals demand rather than lift it. The data behind the response shows why, with China's economy struggling to boost domestic demand and leaning heavily on AI-related exports. Scott-Gray reads the intent plainly, saying "we suspect their main purpose is to stabilize growth, support selected areas of demand and prevent further deterioration in the property market, rather than generating a powerful acceleration in activity". For metals producers and buyers, that distinction matters, since a stabilization program supports volumes at the margin without creating a fresh wave of orders for copper, aluminum or zinc.
"For base metals, this should provide a floor under demand and reduce the risk of a sharper downturn, but it is unlikely to trigger a broad based recovery without clearer evidence of improving property construction and household confidence," Scott-Gray explains. China's property market remains the sticking point, with property sales and fixed asset investment both posting deepening declines year to date. Until property construction and household confidence show clearer improvement, China base metals demand has a floor beneath it but no clear driver above it. In contrast with the policy headlines, sentiment across the complex is what Scott-Gray describes as "near-term bearish to neutral".
Copper shows how China cuts both ways for base metals demand, since seasonal Chinese demand is one of the supports Scott-Gray identifies, alongside ongoing supply risks and continued tariff uncertainty. Specifically, the refined copper market remains in surplus, and speculative money has crowded into the long side, with Comex net long positions at an all-time high. For copper consumers and producers, that combination means Chinese factory data carries weight well beyond the seasonal pickup. According to Scott-Gray, "we do expect volatility to stay historically elevated alongside downside risks from weaker Chinese manufacturing, sticky inflation and hawkish central banks".
Access analysis across the agricultural, energy, metals, and emerging currency markets, alongside critical insights into the factors influencing these markets over the upcoming quarter.
Access Today--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Natalie Scott-Gray, StoneX Senior Metals Analyst EMEA & Asia
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only. StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs. This content does not constitute an offer, invitation, or solicitation to engage in any investment activity. The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice. Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced. This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity. StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate. This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations. Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
China's stimulus is steadying base metals demand without restarting it, as property sales and fixed asset investment keep falling. Natalie Scott-Gray explains why policy support sets a floor for metals, and why weaker Chinese manufacturing remains a downside risk for copper.
The base metals outlook has turned more constructive as softer U.S. data cut Federal Reserve hike odds and China's factory PMI returned above 50. Natalie Scott-Gray, StoneX Senior Metals Analyst EMEA & Asia, explains why metals stayed quiet into quarter end and where supply and demand are diverging. In copper, strike votes at the Escondida and Centinela mines in Chile and falling treatment charges point to a tight concentrate market, even as Chinese inventories build. Tin's backdrop stays strong on an expected drop in Indonesian output and robust semiconductor demand, while nickel remains in structural oversupply despite recent stock draws.
Aluminum, lead and nickel are each sending a different signal on physical metals demand, from softer Japanese aluminum premiums to tight lead concentrate. Inventory levels and premiums show more clearly than headline prices where each market is tightening and where a surplus remains.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bilateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and track record are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform to “boots-on-the-ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
