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The mixed performance by the base metals comes amid heightened risk-off sentiment in the market with the public consultation in respect of the United States’ plans to implement tariffs on a further $200 billion worth of Chinese goods coming to an end on Thursday.
The Chinese Ministry of Commerce said on Thursday that it would take retaliatory action should the US proceed with the implementation of fresh tariffs against China.
Though there has been no word yet on whether US President Trump will go ahead with his plans for further tariffs, the possibility of an escalation in the US-China trade war has made market participants wary this morning, with trade choppy as a result.
Aluminium dipped this morning, despite the high prices of its raw material alumina, with the negative mood in the market dampening investors’ appetite for the light metal.
Aluminium’s most-traded November contract on the SHFE slipped to 14,665 yuan per tonne as at 10.09am Shanghai time, down by 0.1% or 20 yuan per tonne from Thursday’s close.
There was growing pessimism in the market regarding the upcoming announcement of tariffs against China from President Trump, according to Metal Bulletin aluminium analyst Yang Cao.
In addition, the expectation of weaker demand for aluminium in the coming months also put downward pressure on prices.
“Market participants think demand won’t be as strong in the coming days, which also sparked some negativity in the market,” according to an analyst with Guotai Junan Futures.
Zinc was the outperformer of the SHFE base metals this morning, with the metal continuing to find support from low inventory levels; SHFE zinc stocks totaled 29,936 tonnes on August 31, with stocks down 61% or 47,447 tonnes from 77,383 tonnes on January 5.
Zinc’s most-traded October contract on the SHFE climbed 130 yuan per tonne to 21,260 yuan per tonne as at 10.09am Shanghai time, marking a 0.6% increase from Thursday’s close.
Base metal prices
Currency moves and data releases