Base metals prices on the Shanghai Futures Exchange largely consolidated during Asian morning trading on Tuesday January 15, following weakness on Monday that had been driven by poor Chinese trade data.

The SHFE base metals prices moved within narrow ranges this morning, with most of the complex recording marginal gains. The exceptions being aluminium and lead which were little changed with a slight downward bias.

This morning’s performance comes after a weaker showing on Monday, when poor Chinese trade data that showed weakening imports and exports reignited concerns over a downturn in global manufacturing and dampened risk appetite.

In data on Monday, China reported unexpected declines in both import and export growth in December last year, with drops of 4.4% and 7.6% year on year respectively. The fall in imports marked the biggest decline since July 2016. Analysts had forecast China’s export growth would slow to 3%, while imports would increase by 5%.

Yet the more positive note seen in Asian markets this morning – albeit fairly marginal in the base metals so far – comes amid positive trade developments, after the US resumed shipments of crude oil to China from the US Gulf Coast – the first departures since late September 2018.

Market participants have generally viewed this as a positive development in ongoing trade negotiations between the US and China, repairing some of the damage to risk appetite dealt by the latter’s poor trade data.

“In addition to [the US resuming crude oil shipments to China], China is seeking a strong start to the economy in the first quarter to establish conditions favorable to achieving 2019’s major targets, state television reported on Monday, quoting Premier Li Keqiang,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.

“[Li] then went on to state that China would not open a sudden flood of domestic economic stimulus but would seek to keep a controlled flow of tax cuts and other initiatives to meet the target growth in the economy of between 6-6.5% for 2019,” Freeman added.

In copper, supply-side developments in the form of the partial closure of operations at KGHM Polska Miedz’s Rudna copper mine, Europe’s largest copper ore mine, should provide some support to red metal prices – if only „psychologically“, Freeman said.

Additionally, copper stocks at SHFE-approved warehouses were at their lowest level since November 2016 last week; SHFE copper stocks declined by 10,911 tonnes to 97,979 tonnes in the week ended January 11.

The most-traded March copper contract on the SHFE stood at 46,970 yuan ($6,941) per tonne as at 10.22am Shanghai time, up by 80 yuan per tonne or 0.2% compared with Monday’s closing price.