Copper prices on the Shanghai Futures Exchange extended their losses during Asian trading morning on Friday January 4, driven by general risk-aversion stemming from concerns over slowing economic growth in the United States after disappointing data overnight.The most-traded March copper contract price on the SHFE fell to 46,590 yuan ($6,777) per tonne as at 10.18am Shanghai time, down by 720 yuan per tonne from Thursday’s close.

In US data overnight, the Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) fell to its lowest level in more than two years at 54.1 in December, down from 59.3 previously. ISM manufacturing prices were similarly weak at 54.9 last month, down from 60.7 in November.

The weaker-than-expected data sparked a decline in US stock markets overnight, with the Dow Jones Industrial Average plunging 2.8% to close at 22,686.22, the Nasdaq Composite fell 3% to close at 6,463.50 and the S&P 500 declined 2.5% to end the day at 2,447.89.

This weakness in western markets has filtered through to Asian stock markets this morning, as well as sending bearishness through broader markets, including those for the base metals.

Adding further downward pressure to copper prices is the expectation of a ramp-up in production of the metal this year.

“The new capacities and resultant new output seen during the second half of last year will have tremendous impact on the overall production in 2019, which as a result will put a great amount of pressure on copper prices,” Citic Futures Research said on Thursday.

Meanwhile, nickel prices have found support from a steadier stainless steel market in China and declining on-exchange inventories.

The most-traded May contract price rose 640 yuan per tonne to 89,010 yuan per tonne as at 10.18am Shanghai time.

Following sharp price falls in November, Chinese stainless steel prices managed to maintain a generally steady footing in December against a backdrop of falling inventories. This has helped boost confidence across the stainless steel supply chain, including the nickel market.

Fastmarkets MB’s price assessment for benchmark 304 stainless cold-rolled coil in the major market of Wuxi was 14,200-14,800 yuan per tonne including value-added tax for the week ended Wednesday, unchanged from a week

Nickel stocks at SHFE-approved warehouses ended 2018 at 15,259 tonnes, down 68.8% from the 48,920 tonnes seen at the beginning of last year.

London Metal Exchange nickel stocks, meanwhile, remain near their 2018 low at 206,100 tonnes.

“[The] fundamental backdrop still looks fairly positive from the sizeable market deficit and falling global inventory level,” Fastmarkets’ analyst Andy Farida said.