Any support from China to prove temporary

The stabilisation in China’s economy signalled by the flash PMI for August, along with (surely premature) hopes of additional monetary stimulus in the US, is providing some temporary support for commodity prices. However, fears of an imminent “hard landing” driven by aggressive policy tightening had always been overblown. The real threat to high commodity prices from China is a medium-term deceleration in trend growth and a decline in the commodity intensity of economic activity.