Most of the major metal producers are jumping on the Chinese manufacturing data. By this point, EmergingMoney.com readers know the link between China and commodity prices.
As traders digested confirmation that Chinese factories are ramping up again -- and that these factories are likely to remain hungry for raw materials for the near future -- they poured money back into copper, tin, nickel, aluminum, lead and zinc futures in order to get ahead of the curve.
Copper is now trading well above $8,100 a ton, hitting a two-year high of $8,150 this morning in London. Take a look at copper ETF JJC (quote):
Tin is near a record peak of $25,500 a ton and other industrial metals are up 1% to 2% today. This, in turn, is playing into gains for almost the entire metals group:
* iron giants RTP (quote), VALE (quote) and BHP (quote)
* copper producers FCX (quote), SCCO (quote) and TCK (quote)
* nickel producer NILSY (quote)
* aluminum fabricators AA (quote) and AWC (quote) . . . but interestingly, China's own aluminum name ACH (quote) is lagging significantly:
In general, traders should expect good news for China to translate into good news for the metals group, and plan their bets accordingly. If you believe China will keep churning through raw materials, materials companies' business has a great future. If not, then the loss of a core customer will hurt. Meanwhile, a weak dollar naturally supports commodity upside. This is true for the metals (and metal producers) as well as oil.
ChinaCache doubles in U.S. debut
Chinese Web hosting company ChinaCache International Holdings continued a string of solid cross-Pacific IPOs by jumping over 100% in its first day of Nasdaq trading.
ChinaCache (CCIH, quote) priced at $13.90 and opened at $30. By early afternoon, the stock was still trading above $28. Considering that the initial offering priced well above a target range of $10 to $12 and triggered an optional secondary float of 600,000 shares, this performance is fairly spectacular and reflects strong recent appetite for any China-related investment.The company is growing fast, with revenue expanding roughly 29% in 1H 2010 over last year, but has yet to generate consistent profits.
Meanwhile, Chinese fast food chain Country Style Cooking Restaurants (CCSC, quote) continues to impress investors after its Tuesday IPO. The stock opened at $16.50 and is now above $29.