MethodologyContact usLogin
“Chinese officials ‘familiar with the matter’ were casting doubts about reaching a comprehensive long-term trade deal with the US even as the two sides get close to signing a ‘Phase One’ agreement,” National Australia Bank’s head of foreign exchange strategy Ray Attrill said in a morning note.
The agreement would include a pledge for China to buy $40-50 billion worth of American agriculture products and also includes the US not imposing a planned tariff increase on $250 billion worth of Chinese goods, which was supposed to take effect on October 15.
Reports say that China will not budge on the thorniest issues, and officials have relayed low expectations that future negotiations could result in anything meaningful – unless the US is willing to roll back more of the existing tariffs, according to Attrill.
With risk sentiment souring, the base metals traded on the SHFE have largely drifted downward this morning.
Tin led the decline with the metal’s most-traded January contract falling to 137,110 yuan ($19,468) per tonne as at 10.15am Shanghai time, down by 1,230 yuan per tonne – or 0.9% – from Thursday’s closing price of 138,340 yuan per tonne.
This was followed by losses in December copper (-0.7%), December lead (-0.7%), December nickel (-0.2%) and December zinc (-0.2%). Aluminium was unchanged at 13,840 yuan per tonne for its most-traded December contract.
According to ANZ Research analyst Hayden Dimes, trade uncertainties and weaker Chinese manufacturing data were clouding the industrial metals fundamentals.
“Copper prices extended losses […] despite Chile supply disruptions risks and [the fact the] market is likely to be undersupplied,” Dimes said.
“Lead prices continue to descend as well after reaching this year’s high. Zinc prices eased following a strong gains in recent weeks,” Dimes added.
Dimes attributed the fall in nickel prices to the Indonesian export ban already being priced in while “losses were seen to be minimal in aluminium as the metal is hovering below cost of production and trying to find its bottom”.
Other highlights