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Aluminium prices have recovered slightly following a two-day selloff sparked by the news that US would not be implementing secondary sanctions on Russian light metal producer Rusal, nor any of its subsidiaries.
The June aluminium contract price on the SHFE rebounded to 14,430 yuan ($2,286) per tonne as of 10.32 am Shanghai time, up by 0.3% or 45 yuan from Tuesday’s close.
Sentiment in China was buoyed by statements from a politburo meeting on Monday which suggested that country’s central government will adjust its policies to boost domestic demand and loosen its monetary policy. The politburo is a top decision-making body of the ruling Communist Party.
“Chinese buying sentiment strengthened… on further close reading of the politburo statements released on Monday. The market spotted the rarely used expression ‘expand domestic demand’ and significantly, the word ‘deleveraging’ was omitted from the politburo communique,” John Browning, managing director of Bands Financial said on Wednesday.
“This was the first politburo meeting since December 2014 to emphasize boosting domestic demand, a sign the government is prepared to fine-tune its policies to bolster growth as exports may face headwinds amid trade tensions and an uncertain economic outlook in the US,” Browning added.
The Shanghai Composite Index jumped 2% to 3,128.93 at the close on Tuesday, a recovery after Asian markets were dampened last week as the US and China squared up over trade tariffs.
Better-than-expected data from the United States overnight also provided support to the base metals complex.
US consumer confidence rebounded in April and new home sales increased more than expected in March, pointing to underlying strength in the country’s economy despite signs that growth had slowed in the first quarter of the year.
Base metals prices
Currency moves and data releases