On Tuesday, the office of the US Trade Representative (USTR) released a proposed tariff list of Chinese products on which the United States is targeting with a 25% import tax following its Section 301 investigation.
The 1,300-item list included unwrought aluminium, aluminium alloys, aluminium and aluminium alloy fabricated products such as bars, rods, profiles, sheets, plates, strips and foil, as well as steel and stainless steel products.
China’s Ministry of Commerce responded on Wednesday with a statement saying that it “strongly condemns and firmly opposes” the newly proposed tariffs, and also warned of retaliatory measures of the same scale against the US.
“A concern will be revived when the US implements its proposed $50 billion tariffs in response to alleged intellectual property theft and China responds in kind. Investors…globally should be mindful of the collateral damage that will be done - and there will be plenty of it in such an overextended speculative environment,” financial broker IG said on Wednesday.
In data, China’s Caixin services purchasing managers’ index (PMI) for March came in at 52.3, below an expected print of 54.5 and was also the lowest reading in four months.
“Both new business and employment grew at a slower rate last month, pointing to cooling demand,” Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group said.
“The slowdown of output growth in the services sector was faster than that in the manufacturing industry. The increase in input costs slowed while that in output prices picked up, improving chances for companies to gain a profit.”
“Overall, the growth momentum of the Chinese economy weakened in March,” Zhong added.
The March Caixin manufacturing PMI announced on Monday had also come in below expectations.
Base metals lower except copper, tin
- The SHFE May copper contract rose 70 yuan to 50,440 yuan per tonne.
- The SHFE May zinc contract fell 55 yuan to 24,710 yuan per tonne.
- The SHFE May lead contract decreased 15 yuan to 18,690 yuan per tonne.
- The SHFE May tin contract gained 50 yuan to 145,450 yuan per tonne.
- The SHFE July nickel contract eased 120 yuan to 100,670 yuan per tonne.
Currency moves and data releases
- The dollar index was down by 0.09% to 90.07 as of 11.43am Shanghai time.
- The Brent crude oil spot price fell by 0.37% to 67.89 as of 11.44am Shanghai time.
- In equities, the Shanghai Composite rose 0.8% to 3,161.70 as of 11.30am Shanghai time.
- In data released on Tuesday, the United Kingdom’s manufacturing PMI for March came in at 55.1, above expectations of 54.8. Meanwhile the US’ IBD/TIPP economic optimism for April was at 52.6 - below a forecast reading of 55.2.
- Major US data scheduled for release later today includes ADP non-farm employment change, final services PMI, ISM non-manufacturing PMI, factory orders and crude oil inventories.
|SHFE snapshot at 11.34am Shanghai time|
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|LME snapshot at 04.34am London time|
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|Changjiang spot snapshot on April 4|
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