The China PMI (Purchasing Managers’ Index) data indicates that concern around industrial metals, especially the non-ferrous kind, may have some basis to it. China is the most closely watched country for signals that could affect commodity prices. Fear of its economy slowing down and the impact of the ongoing trade war with the US have made investors a bit edgy. The China PMI data does show that manufacturing output in August rose at the fastest pace since January. The problem is that demand conditions weakened, new orders rose at the slowest pace since May 2017 and exports fell for the fifth successive month. If China’s output remains steady but demand at home and abroad does not revive, production will have to be cut or else the surplus will head for export markets, leading to weaker prices. That’s a risk for commodities. For now, the BSE Metal index does not display any fears. Domestic demand conditions are good and a depreciating rupee means better realizations even as their costs don’t increase as much. A sharp fall in global commodity prices is the main risk that can turn the tide against them.