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Lead was the worst performer of the complex, with its most-traded February contract sliding to 14,985 yuan ($2,149) per tonne as at 11.30am Shanghai time, down 115 yuan per tonne – or 0.8% – from Friday’s close of 15,100 yuan per tonne.
Barring tin, the rest of the complex was content to track lead’s downward move: the February copper contract dipped by 0.2% to 48,910 yuan per tonne, the February aluminium contract slid by 0.2% to 13,920 yuan per tonne, the February zinc contract dropped by 0.5% to 18,015 yuan per tonne and the March nickel contract fell by 0.2% to 110,690 yuan per tonne.
Tin was the lone metal to record a gain this morning; the most-traded January contract ticked up by 0.6% to 140,580 yuan per tonne.
The general weakness in the market was attributed to a lack of confidence among investors despite US trade representative Robert Lighthizer saying on Sunday that the “phase one” US-China trade deal is “totally done” and will nearly double US exports to China over the next two years.
China also said it was suspending additional tariffs on some US goods that were meant to be implemented on Sunday following the agreement.
But despite these positive developments, the deal has yet to be officially signed and tariffs of 25% remain on $250 billion of goods and this is weighing on sentiment.
“For now, escalation seems to be off the table. However, the path to the comprehensive agreement is still miles away,” Stephen Innes, Asia Pacific market strategist at AxiTrader, said in a morning note.
“Ultimately, [the] phase one deal fell short of market expectations and is probably not enough to fully restore business confidence or generate a meaningful recovery in exports or investment,” Innes added.
Positive data releases out of China this morning also failed to provide a significant boost to sentiment.
Chinese industrial production growth quickened more than expected to 6.2% November from a year earlier and reaching a five-month high, according to the National Bureau of Statistics. Fixed asset investment was in line with expectations with a 5.2% gain, while retail sales were stronger than expected with an increase of 8% versus the forecast 7.6% growth. Other highlights