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The SHFE base metals complex moved within narrow ranges on Thursday morning with copper and zinc recording slight losses, while the rest were up marginally.
The slightly more positive performance by the SHFE base metals comes amid an uptick in market sentiment following moves by the People’s Bank of China (PBOC) to boost liquidity to encourage lending among banks.
“Moves by China’s central bank to support growth boosted sentiment in the base metals sector. It offered RMB257.5 billion ($37.7 billion) of liquidity to encourage banks to lend to small businesses. This comes ahead of the second RRR cut which takes effect on [January 25],” ANZ Research said in a morning note.
The central bank injected the sum via its targeted medium-term lending facility (TMLF).
“The appropriate scale of TMLF operations by the central bank will facilitate the transmission of wide credit, and the Ministry of Finance will study larger tax cuts and more obvious reductions,” an analyst with Guotai Junan Futures noted.
But the positivity stemming from China’s recent stimulus measures continues to be overshadowed by lingering concerns regarding US-China trade negotiations and fears of slowing global economic growth, capping the gains seen in the SHFE base metals this morning.
Tin was the star performer of the SHFE base metals complex, with the metal’s most-traded contract on the SHFE rising by 0.7% or 1,060 yuan per tonne to 148,410 yuan per tonne as at 10.24am Shanghai time.
The tin market remains underpinned by disruptions to shipments from Indonesia, tin’s second-largest global exporter. State-owned Indonesian company PT Timah remains the only entity able to export material from the country, but most of its business is tied up in long-term deals.
Since the stoppage in exports began in October 2018, European tin premiums have risen by more than 30%. Base metals prices
Currency moves and data releases