China News Service September 27th News (Editor Xiaoxiang) In recent trading days, with the dual measures of China's monetary and fiscal stimulus policies, not only has it driven the A-share market to soar, but it has also helped some global commodities that were under considerable pressure earlier in the third quarter, to experience a rebound reminiscent of a dragon's abrupt movement.

Whether it is precious metals, industrial metals, or black commodity products, a series of key integer levels and resistance levels have been successively broken this week: London copper has been forcefully broken through the 10,000 US dollar integer level, Singapore iron ore futures have regained the 100 mark, and spot silver prices have reached a 12-year high!

StoneX Financial's metal division head, Michael Cuoco, stated that the Chinese government is attempting to restore people's confidence in the economy and is sending positive signals to the market and the public.

rio tinto CEO Jakob Stausholm pointed out in an interview, "We have observed that the (metal) market conditions have been weakening for some time, and stimulus measures may help stabilize the market."

The Politburo of the Communist Party of China held a meeting on September 26 to analyze and study the current economic situation and deploy the next economic work. The meeting emphasized the need to increase the intensity of countercyclical adjustments in fiscal and monetary policies, ensure necessary fiscal expenditures, and effectively carry out grassroots "three guarantees" work. It is necessary to issue and use ultra-long-term special national bonds and special bonds of local governments to better leverage the role of government investment. It is necessary to reduce the reserve requirement ratio and implement substantial interest rate cuts. It is necessary to promote the stabilization of the real estate market.

The People's Bank of China announced on Friday (September 27) further measures: a 0.5 percentage point reduction in reserve requirement ratio and a 20 basis point reduction in the 7-day reverse repurchase operation rate. The People's Bank of China stated that it will maintain a supportive monetary policy stance, increase the intensity of monetary policy regulation, enhance the precision of monetary policy regulation, and create a favorable monetary and financial environment for the stable growth and high-quality development of the Chinese economy.

London copper "breaks ten thousand"

Market data shows that the three-month copper price on the London Metal Exchange (LME) broke through the psychological barrier of $10,000 per ton on Thursday, reaching as high as $10,090, the highest since June 7. Many analysts believe that after China relaxed its monetary policy to boost the sluggish economy, Thursday's announcement of new fiscal stimulus measures has significantly increased hopes for a metal demand recovery.

Fu Xiao, Chief Global Commodities Market Strategist at Bank of China International, said: "Yesterday (Wednesday) some doubted whether fiscal stimulus measures would follow monetary easing policies, but today they appeared, so everything is very positive in terms of China's supportive measures. After the Fed's rate cut, China has greater leeway to implement supportive policies, as the Renminbi has remained relatively strong."

Analyst Ji Xianfei from China CITIC Futures also pointed out that before China announced macroeconomic bullish policies, the Fed had already cut rates by 50BP, and the strong expectation of a substantial rate cut later in the year still exists, showing the Fed's strong determination to prevent economic decline, which helps long-term support for market risk appetite. China's favorable policies support the development of the real estate industry, helping to boost copper consumption expectations in real estate. On the supply side, due to tight copper mine supply and concentrates, as well as the impact of smelter maintenance, China's refined copper production remains weaker than expected. In terms of supply and demand, domestic social inventories may continue to deplete.

In addition to the copper price, prices of other major industrial metals on LME also rose almost across the board on Thursday. LME aluminum rose 3.1%, hitting the highest since June 7 at $2,616.50 per ton; LME zinc surged 3.4%, reaching the highest since May 30 at $3,098; LME lead rose 1.9%, to $2,136.50.

This surge in industrial metals has even led to a sharp rise in global mining stocks. $Southern Copper (SCCO.US)$ rose more than 8%, $Freeport-McMoRan (FCX.US)$ up more than 7%.

Iron ore prices 'break 100'.

In the black sector, due to the renewed confidence in the prospects of the China real estate, the iron ore prices, commonly known as the 'crazy stone', also soared to the highest level in over three weeks overnight.

Singapore iron ore futures prices rose to $101.25 per ton on Thursday, the highest level since September 2.

Analysts at ANZ Bank said in a report that the rise in iron ore futures prices is due to market expectations that China's support measures for the real estate market will reverse its fate.

However, the institution also noted that although stimulus measures should prevent the deterioration of the steel market conditions, they are unlikely to boost short-term demand, as this year's steel production will still be below the 2023 level.

Huatai Futures also pointed out that 'driven by macro stimulus policies, iron ore is strong in the short-term, but the spot market remains cautious. If there is no significant improvement in steel demand, the supply and demand of iron ore will not be balanced, and downside risks still exist.'

Silver hits 12-year high

In response to China's economic stimulus measures, it is clear that not only basic metals and black commodity products are being boosted. In the precious metals sector, the price of silver, which has a stronger industrial attribute, has also been rising all the way.

The spot price of silver was around $32.03 per ounce by the end of Thursday, reaching a high of $32.71 since December 2012. Silver is both a safe-haven investment and a key raw material in industrial applications, with a year-to-date increase of over 35%.

Fiona Fu, Head of Global Commodity Market Strategy at Bank of China International, stated, "Silver is expected to continue its climb in the coming quarters, as continuous interest rate cuts and China's stimulus policies may persist for some time." She predicts that silver prices will rise to the $37 level.

Aneeka, Director of Macroeconomic Research at WisdomTree, pointed out that one of the main catalysts for the rise in silver is gold, as the two have a strong correlation. Gupta mentioned that the gold/silver ratio is decreasing as the price of silver continues to rise.

Editor/Somer