Base metals prices, barring those for nickel, on the Shanghai Futures Exchange were down across the board during Asian morning trading on Thursday January 10 following the release of weaker-than-expected Chinese data.
China’s producer price index (PPI) rose 0.9% year on year in December 2018, which was well short of an expected 1.6% gain and down from the 2.7% year-on-year increase registered in the month prior.
Meanwhile, the country’s consumer price index (CPI) rose 1.9% year on year last month, below an expected 2.1% gain and down from the 2.2% year-on-year gain seen in the preceding month.
Both indices hit their lowest growth rates in over two years.
The disappointing data more than offset the recent positivity stemming from trade headlines and a weaker US dollar.
The three-day trade talks between Chinese and US delegates ended on a generally positive note on Wednesday, with China reportedly agreeing to increase imports of US energy, manufactured and agricultural goods.
“Though the official word from the Office of the US Trade Representative was fairly bland (a formal statement is promised on Thursday morning US time). The [Wall Street Journal] reports that the two sides are making progress toward an agreement but leaving the thorniest issues to be resolved in higher-level talks,” Ray Attrill, head of FX strategy at the National Australia Bank, said in a morning note.
In currencies, the dollar continued to edge lower following the release of the minutes from the US Federal Open Market Committee’s (FOMC) December meeting, which reiterated the message that monetary policy needs to flexible and can be put on hold for now.
As a result, the dollar stood at 95.09 as at 11.13am Shanghai time, down from a reading of 95.81 on Wednesday morning.
Despite this, the base metals, with the exception of nickel, were all down this morning.
The most-traded March copper contract price on the SHFE dropped at 47,490 yuan ($6,953) per tonne as at 11.12am Shanghai time, down 190 yuan per tonne from Wednesday’s close.
Nickel was the only metal to shrug off the weaker economic data out of China and record any gains this morning; the most-traded May nickel contract price rose 380 yuan per tonne to 91,720 yuan per tonne at 11.12am Shanghai time.
“Nickel prices have found some technical support, including multiple positive headlines, weaker US dollars, as well as uptick of nickel price on the London Metal Exchange,” Guotai Junan Futures said.
