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The impressive rally seen in the industrial metals space looks to be unwinding as early indications appear to show China will not continue its rate of stimulus into the second quarter. Both copper and iron ore prices are at key points in the charts, with further downside on the cards if support levels are broken.
A slew of recent economic data out of China shows a recent acceleration in China’s activity indicators appears to be levelling off going into the second quarter. Slightly lower manufacturing purchasing managers’ index figures, further declines in imports growth and relatively unmoved consumer price index inflation are all providing fundamental support to the pullback seen in a range of commodity prices.