In brief
- Fundamental data are the official statistics of the real economy — production, prices, labour, trade, energy, public finance — published by institutions such as Eurostat, the Federal Reserve, the Bureau of Labor Statistics or the Chinese statistics office.
- Reading them takes four checks: the frequency (monthly, quarterly, annual), the type of measure (level, index with a base, change), seasonal adjustment, and the preliminary nature of recent figures, which get revised.
- The series that matter most for metals are industrial production, confidence indices and PMIs (leading), GDP (confirmation), producer prices (costs and margins), product statistics (PRODCOM) and energy prices.
- Leading indicators are read against a threshold: 50 for PMIs, 100 for the ESI and the OECD indicators, zero for the regional Fed surveys and the CFNAI.
- Fundamentals do not forecast tomorrow's price: they give the context in which quotations move and help tell a market move from a change in the cycle.
Why fundamentals matter to metal buyers
The LME price of copper or aluminium is where physical demand, stocks and expectations meet. Expectations form on fundamentals: if European industrial production slows for three months, if Chinese PMIs drop below 50, if American building sites stop, expected metal demand changes before orders do. Anyone buying metal with a horizon of months needs to read those signals with the same rigour applied to a quotation.
Official statistics have two merits market commentary lacks: they are built with a declared method and they are comparable over time. An industrial production series with sixty years of history shows whether today's slowdown looks like 2012 or like 2009. It is the difference between knowing that "the market is weak" and knowing how much, since when and compared with what.
How to read a time series
Every series must be read together with its metadata. Frequency says how timely it is (a monthly PMI arrives early in the month, a quarterly GDP six to eight weeks after the quarter ends). The type of measure says what is being compared: a level (tonnes, billions of euro), an index with a base (European industrial production with base 2021=100, HICP with base 2025=100, US production with base 2017=100) or a change, either on the previous period or on the same period a year earlier.
Seasonal adjustment removes recurring rhythms — August holidays, Chinese New Year — and makes two consecutive months comparable: raw data can only be compared year on year. In the United States many series are annualised (SAAR): quarterly GDP growth "of 2%" means that, if that pace lasted a year, GDP would grow 2%; in Europe the same figure is published as a change on the quarter, about four times smaller. Finally, recent data are preliminary: first estimates are revised, sometimes more than once, and a good database keeps the previous values instead of overwriting them.
GDP and national accounts
Gross domestic product measures the value of everything an economy produces in a period. For markets it matters mostly in its breakdown: consumption, investment — the buildings and machinery that absorb steel, copper and aluminium — government spending and net exports. In Europe national accounts follow the ESA 2010 standard and are published at current prices and in chain-linked volumes; in the United States the NIPA accounts of the Bureau of Economic Analysis start in 1929 and are expressed in chained 2017 dollars.
GDP is a confirming indicator, not a leading one: it arrives after the quarter closes and gets revised. Its value for metal market participants lies in the long series and in the comparison between economies: GDP per capita and purchasing power parities say how much a country can absorb, value added by branch says how much manufacturing sits behind an aggregate. The IMF projections (World Economic Outlook) complete the picture with the medium-term scenario.
Industrial production and the business cycle
It is the series closest to metal demand. In Europe the short-term statistics (STS) indices measure every month production, turnover, orders and prices of industry with the detail of NACE sectors — from metallurgy to machinery — with base 2021=100 and history from 1953. In the United States the Federal Reserve index (INDPRO, base 2017=100, from 1919) breaks down by NAICS industry: 331 is primary metals, with iron and steel, alumina and aluminium, other nonferrous metals and foundries. In China the statistics office publishes the growth of industrial value added and the monthly physical output of crude steel, pig iron, refined copper, electrolytic aluminium and the ten nonferrous metals.
Next to production one reads capacity utilisation (how much of the plants is working: above 80% US industry is close to its limits), durable goods orders and, for construction, permits and housing starts. These are coincident or slightly leading series: a fall in orders precedes by a few months a fall in production, which precedes a fall in metal consumption.
Confidence indices and leading indicators
Surveys ask companies and consumers how they see the present and the coming months; they are the most timely series — released at month end or in the first days of the following month — and that is why they move markets. In Europe the Commission publishes the confidence indicators for industry, services, retail, construction and consumers, expressed as the balance between positive and negative answers, and summarises them in the Economic Sentiment Indicator (ESI), built with a long-term average of 100: above 100 the climate is better than its historical average.
PMIs (Purchasing Managers' Index) have a different threshold: 50. Above 50 manufacturing activity expands, below it contracts, and the sub-indices — new orders, output, employment, delivery times, inventories — say where the movement comes from. The NBS Chinese manufacturing PMI is available from 2005 with all its sub-indices. In the United States the regional Fed surveys (New York, Philadelphia, Dallas) are diffusion indices with a zero threshold, and the Chicago Fed's CFNAI summarises 85 indicators in a single number where zero corresponds to trend growth. The OECD composite leading indicator, finally, is centred on 100 and designed to anticipate turning points of the cycle by six to nine months.
Prices and inflation: CPI, HICP and PPI
Consumer inflation — the European HICP, the American and Chinese CPI — is the figure that drives central banks and therefore interest rates, exchange rates and the cost of the money used to finance metal stocks. The HICP is published with base 2025=100 for every item of the COICOP classification and with the official weights of each national basket; "core" data exclude energy and food and show the underlying trend.
For producers, producer prices (PPI) matter more: they measure what companies receive at the factory gate. The metals group PPI of the Bureau of Labor Statistics starts in 1926; European producer prices are available by NACE sub-sector, split between domestic and non-domestic market; China publishes the PPIs of ferrous and nonferrous metallurgy by industry. The gap between PPI and CPI says whether companies' costs are being passed downstream or absorbed in margins — decisive information when negotiating indexed price lists.
Labour and demography
The labour market confirms the state of the cycle: monthly unemployment, employment by sector (quarterly and annual labour force data by NACE branch), job vacancies and the labour cost index. In the United States nonfarm payrolls, the unemployment rate, JOLTS job openings and average hourly earnings are released on the first Friday of the month and are among the most watched data.
For a metal buyer, labour is a context and cost series: unit labour cost feeds into the prices of semi-finished products, and demographic projections — Eurostat publishes them to 2100 — say where the structural demand for housing, infrastructure and durable goods will grow.
Production and trade by product: PRODCOM and supply chains
Eurostat PRODCOM statistics go down to the single industrial product: for more than ten thousand codes — ores, pig iron, steels, aluminium, copper, zinc, lead, tin, nickel, semi-finished products, scrap — they report sold production, total production, exports and imports of every EU country and of the aggregate, in value and in quantity, from 1995. It is the level of detail at which a purchase is compared with the market: how much rolled aluminium Europe produces, how much it imports, how long it has been falling.
Read along the supply chain — ore, intermediate, primary metal, semi-finished product, scrap — these data show where a tension is forming: falling cathode imports with rising scrap exports tell of a market that is emptying. The NBS Chinese physical volumes complete the picture on the world supply side.
Energy, interest rates, exchange rates and public finance
Energy is the first cost of foundries and smelters: electricity and gas prices for European businesses by consumption band, monthly energy balances, Brent, Henry Hub gas and the EIA US industrial electricity price, Chinese coal and coke. When European electricity doubles, primary aluminium production stops before the LME price tells the story.
Interest rates and exchange rates close the circle. Policy rates (Fed Funds, ECB rates and the euro area yield curve, the Chinese policy rate) set the cost of financing stocks and the contango of forward markets; the euro-dollar exchange rate translates into euro an LME price quoted in dollars — the dedicated guide covers it; the BIS effective exchange rates measure an economy's competitiveness. Public finance — European debt and deficit, the US federal budget line by line and the federal debt updated daily — says how much room governments have to support demand.
How to use fundamentals alongside LME quotations
A simple three-step method. First: start from the leading indicators (PMIs, confidence, orders) to understand the direction of the coming months. Second: check with coincident data (industrial production, capacity utilisation, physical volumes) whether the direction is materialising. Third: read the costs (energy, PPI, rates, exchange rate) to understand whether a price is moving on demand or on costs. A copper rally with falling PMIs and rising LME stocks is a different story from a rally with PMIs above 50 and growing Chinese imports.
Fundamentals do not replace quotations and do not forecast them: they explain them. On the FT Mercati platform the official series sit next to LME prices, the Milan Indexes and premiums, with search in five languages and the AI assistant that helps find the right series and bring it into the workspace. The fundamental data page describes the full catalogue.
Frequently asked questions
What are fundamental data?
They are the official statistics of the real economy — production, prices, labour, trade, energy, public finance, demography — produced by national and international institutions (Eurostat, Federal Reserve, BLS, BEA, Chinese NBS, EIA, OECD, BIS, IMF). They describe the conditions in which market prices form.
What is the difference between seasonally adjusted and raw data?
Seasonally adjusted data remove the recurring rhythms of the year (holidays, festivities, seasons) and allow a month to be compared with the previous one. Raw data must only be compared with the same period of the previous year. Comparing two consecutive raw months almost always leads to a wrong conclusion.
What does a PMI of 48 mean?
That most of the purchasing managers surveyed report a deterioration compared with the previous month: the PMI threshold is 50, above it there is expansion, below it contraction. A reading of 48 indicates a moderate contraction; duration (how many months below 50) and the sub-indices, especially new orders, also matter.
Why does US GDP grow "by 2%" and European GDP "by 0.5%"?
Because in the United States the quarterly change is annualised (SAAR): it expresses how much the economy would grow in a year at that pace. In Europe the change on the previous quarter is published, about a quarter of the annualised value. A European 0.5% on the quarter is equivalent to roughly an American 2%.
What does base 2021=100 mean?
That the average value of the year 2021 is set equal to 100 and all other periods are expressed in proportion: a production index at 104 means 4% above the 2021 average. Changing the base year does not change percentage changes, but makes the levels of series with different bases non-comparable.
Are the data revised?
Yes, systematically: first estimates of GDP, industrial production and employment are revised in the following months as more complete information arrives. A serious database keeps the previous values and flags the preliminary status: on the FT Mercati platform every revision is tracked and the quality flag of the source remains available.
Sources
References for this guide:
- Eurostat — short-term statistics (STS) and national accounts
- FRED, Federal Reserve Bank of St. Louis
- Federal Reserve — Industrial Production and Capacity Utilization (G.17)
- European Commission — Business and consumer surveys
- National Bureau of Statistics of China
- OECD — Composite leading indicators
This guide is for market information purposes and does not constitute financial or commercial advice: purchasing and hedging decisions should be taken with your own advisers.