Copper and iron ore, the industrial metals most likely to benefit from China's renewed growth, have enjoyed strong starts to the new year but they run the risk of rallying too hard, too quickly.
No doubt investors have been cheered by the avoidance, for now anyway, of the fiscal cliff in the United States and growing signs that China's economy is re- accelerating after achieving a soft landing last year.
Asian spot iron ore <.IO62-CNI=SI> gained 3.4 percent in the first two trading days of 2013, taking it to $149.80 a tonne, a rally of 73 percent since the low of $86.70 in September last year.
London copper rose 2.7 percent the past two days to $8,149 a tonne, taking its gains since its low last June to 12.3 percent.
Shanghai copper didn't trade for the first three days in January due to Chinese holidays, but by 9 a.m. Local time Friday it had gained 1.2 percent to 58,390 yuan ($9,268) a tonne, up 14 percent from the low last year, also recorded in June.
What copper and iron ore have in common is that they all declined as the market feared a hard landing in China, and all started to recover when it became clearer that these concerns were overblown and that the elusive soft landing was more
But the recovery in China's key manufacturing sector is still modest, and certainly nowhere the scale of the rally seen after the global financial crisis and recession of 2008-09.
The official Purchasing Managers' Index held steady at 50.6 in December, it's third consecutive month above the 50 mark that separates expansion from contraction.
The official survey was slightly more muted than the HSBC PMI, which rose to 51.5 in December, its highest reading in 11 months.
However, the official survey captures more of the large, state-controlled industries that are key to metals demand, while HSBC focuses more on smaller enterprises.
The official PMI recorded a 2012 low of 49.2 in August, meaning it has gained 2.8 percent since then.
This is a small rally compared to between November 2008 and December 2009, when the PMI gained from 38.8 to 56.6, a jump of 46 percent, and even well short of the 8.8 percent gain recorded between November 2011 and April last year.
The huge jump in the PMI in 2008-09 was matched by similar gains in metal prices, with iron ore surging 216