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“There was some disappointing economic data out during the holiday [October 1-7], and this has affected metals’ prices to some degree,” a Chinese broker told Fastmarkets.
The SHFE base metals exhibited mixed moves this morning as a result, with copper, aluminium and zinc drifting lower while the rest ticked upward.
Copper was the worst performer with the metal’s most-traded November contract sliding to 46,930 yuan ($6,564) per tonne as at 9.25am Shanghai time, a decline of 330 yuan per tonne – or 0.7% – from a close of 47,250 yuan per tonne on September 30, the last trading day before China’s National Day holiday.
“Copper is mainly being affected by the negative macro sentiment. The PMI [purchasing managers’ index] readings in September from Germany, Europe and the United States published [last week] were all near multi-year lows,” an analyst with Chinese brokerage Galaxy Futures said in morning notes.
“However, some new infrastructure projects will come online next year in China and this could offer some support to the copper price in the first half year next year,” the analyst added.
Furthermore, with trade talks between the US and China scheduled for Thursday and Friday this week, investors are adopting a fairly cautious approach to trade which is likely another reason behind the underwhelming performance of the SHFE base metals.
Shrugging off the sluggish start to the week was lead, which led on the upside following persistent drawdowns in exchange inventories.
Lead stocks at London Metal Exchange-listed warehouses totaled 69,100 tonnes on Monday, down from 77,525 tonnes on September 2. Deliverable lead stocks at SHFE warehouses stood at 15,506 tonnes on September 30, the lowest since December 2018, having contracted consistently since August.
The most-traded November lead contract on the SHFE rose to 17,195 yuan per tonne, up by 275 yuan per tonne – or 1.6% – from 16,920 yuan per tonne on September 30.
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