More evidence emerged today showing that Chinese manufacturing activity is continuing to slow following a strong start to 2013.
The Chinese governments official purchasing managers index fell from 50.9 in March to 50.6 in April, although as the reading is over 50 still in expansionary territory. Manufacturing accounts for approx 45% of Chinese GDP.
The official PMI tallies with preliminary HSBC PMI data which showed activity slowing from 51.6 to 50.5.
Related article: Chinese manufacturing output slows in April
Copper (the main exchange traded commodity with a large exposure to Chinese demand) fell by 0.8% this morning. Copper prices fell by 7% in April, the sharpest monthly decline since May 2012.
As we have argued before, there could be further price weakness in copper and other industrial metals later in the second quarter before growth in Chinese manufacturing returns later in the second half of 2013.
Related article: Where next for copper prices?