Talking Points: China PMIs, Manufacturing, and Iron Ore With a reading of 50.9 in June, China’s Manufacturing PMI index outperforms forecasts. As steel plants close for centenary celebrations, iron ore prices plummet. If the tension grabs Asia, the Covid Delta variation may soon put a dent in metal prices. The purchasing managers’ indexes for the services and industrial sectors were announced by China’s National Bureau of Statistics (NBS). According to the DailyFX Economic Calendar, the manufacturing index for June crossed the wires at 50.9, versus a consensus prediction of 50.8. The non-manufacturing figure (services) fell from 55.2 to 53.5. Despite the positive manufacturing report, iron ore prices, which are primarily reliant on Chinese demand, remained unchanged. Fears that Chinese authorities would intervene in markets to calm soaring prices prompted a sell-off in industrial metal ore overnight. The price of benchmark 62 percent iron ore was $206.65, down 3.64 percent on the day. Following a series of contradictory economic signals in recent months, China’s economic recovery has been called into question. The world’s second-largest economy, on the other hand, is on track to post its best growth in a decade. China’s economy is expected to increase 8.4% this year, according to the International Monetary Fund’s World Economic Outlook. However, if the virus strain spreads to Asia, the developing Delta Covid version, which is expected to be more contagious, could pose a threat to growth. In addition to regulatory steps, the Chinese government has put pressure on ferrous metals, especially iron ore, as the country prepares to commemorate 100 years of communist rule. Steel mills were forced to reduce production as part of the centennial celebrations in order to comply with government restrictions aimed at decreasing pollution in the Beijing and Shanghai areas. The anniversary celebrations will go on for the rest of the week. Iron ore prices, on the other hand, may not recover until next week. TradingView was used to create this Iron Ore Daily ChartChart. TRADING RESOURCES FOR IRON ORE—- Thomas Westwater, a DailyFX.com analyst, wrote this article. Use the comments area below to reach Thomas, or follow him on Twitter at @FxWestwateron.