(MB) Base metals prices on the Shanghai Futures Exchange were broadly down during Asian morning trading on Wednesday January 2, the first trading day of the new year, after disappointing Chinese data provided further evidence of slowing growth in the world’s second-largest economy. In Chinese data released earlier on Wednesday, the country’s Caixin manufacturing purchasing managers’ index (PMI) for December fell to 49.4, from 50.2 in November. The latest reading showed factory activity contracted for the first time in 19 months amid a continuing trade dispute with the United States. A reading above 50 indicates expansion, while below that signals contraction. This weaker-than-expected data follows a similarly disappointing release on Monday, which saw China’s official manufacturing PMI fall to 49.4 in December, according to the country’s National Bureau of Statistics. This was below November’s reading of 50 and marked the weakest reading since February 2016. The data reignited concerns over reduced metal demand due to slowing growth in China, which in turn weighed on prices for the base metals this morning. The most-traded February copper contract on the SHFE fell to 48,040 yuan ($6,985) per tonne as at 9.33am Shanghai time, down by 0.6% or 300 yuan per tonne from last Friday’s close. The exchange was closed on Monday and Tuesday due to national holidays in China.

“The global economy remains weak, with downward pressure on China’s economy weighing on financial markets and metals demand. At the same time, both sides of coppers’ supply chain have adopted a wait-and-see stance which has led to thin market activity and temporary pressure on copper prices,” Guotai Junan Futures said on Wednesday.  Zinc was down the most, however, with the metal also contending with a backdrop of rising availability. The most-traded February zinc contract price on the SHFE fell 0.7% or 155 yuan per tonne to 20,770 yuan per tonne as at 09.33am Shanghai time. Total mined zinc output rose by 112,000 tonnes in the first nine months of 2018 compared with a year earlier, according to the International Lead and Zinc Study Group (ILZSG). The study group now expects global mine output to grow by 2% to 13.03 million tonnes in 2018 and a further 6.4% to 13.87 million tonnes in 2019. “Growing global mine output and rising TCs could translate into higher global refined output… So we expect [zinc prices] to continue to consolidate near recent lows in the very short term because [zinc’s] fundamental backdrop in 2019 does not look as bullish as that of 2018,” Fastmarkets analyst Andy Farida said.   The rest of the complex were either little changed with a slight upward bias, as was the case in nickel and lead, or slightly weaker in the case of aluminium and tin.