0036 GMT [Dow Jones] A spike in speculative commodities trading by Chinese investors "has stunned global markets" and is behind the rally in iron-ore prices to a year-to-date peak around US$70/ton last week, says Morgan Stanley. "Commodity futures trading activity in China surged again, up across trades such as cotton, eggs, garlic, PTA, PVC and, of course--iron ore and steel," the broker notes. It thinks the upcoming May 1 holiday in China may cause a "short-term pullback" in trading activity and commodity prices. "More broadly, we regard May as a point at which commodity trade flows and production rates typically moderate anyway," Morgan Stanley says.
I have highlighted the bit that probably has relevance to us in lithium. We all know the market is about supply v demand. We are seeing some short term demand weaken because of factors outside of this particular stock. Nothing to worry about if you are in it for the longer term.
GXY Price at posting:
37.5¢ Sentiment: None Disclosure: Held
