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“China continues to hint at promoting domestic growth and implied that the government is ready to do what it takes to support the Chinese economy and businesses. Still, such policies will take time to come to fruition — the main stumbling block to growth remains the simmering trade war with the US, which is unlikely to end any time soon,” Fastmarkets analyst Andy Farida said.
The ongoing conflict between the two major economies has rattled investor confidence this year, with sensitivity to the slightest hint of a prolonged US-China trade war quickly undermining gains seen in the base metals complex.
Zinc continued its downward trend, with its most-traded December contract falling 1% to 21,455 yuan ($3,099.81) per tonne.
According to Fastmarkets analyst James Moore, while the global refined zinc market is expected to hit a deficit of 322,000 tonnes this year, up from the forecast of 263,000 tonnes last May, “downstream signals from the automotive and construction sectors, while supportive overall, have shown signs of slowing”.
He noted that global light vehicle sales in September dropped 8.5% year on year. January-September sales were up by a modest 1.7%, compared with the 3.5% growth seen in January-June, he added.
Similarly, for nickel, despite falling stocks, negative macro-economic conditions continued to hurt this market. Nickel’s most-traded January contract price fell 0.6% to 97,820 yuan per tonne.
“The market lacks bullish conviction and the reaction from the base metals is to adhere to the prevailing downtrend for now,” Farida said.
Base metals prices
Currency moves and data releases