Base metals prices, barring those for tin, on the Shanghai Futures Exchange were up during Asian morning trading on Monday January 21, with residual optimism over trade talks between China and the United States helping to offset some weak Chinese data earlier this morning. Market sentiment had turned more bullish late last week following news that the US was mulling the removal of tariffs on Chinese imports, resulting in general strength across more riskier assets, including the base metals.
“Risk markets were well supported on hopes of a breakthrough in the US-China trade talks and better-than-expected US manufacturing output data. US manufacturing output rose strongly, up 1.1% [month on month] – its biggest rise in ten months,” ANZ Research said in a morning note.
This more bullish tone in the market has persisted into trading on Monday, giving the base metals a slight boost while the market digests a slew of Chinese data released this morning.
China released a host of data on Monday morning including full-year 2018 gross domestic product (GDP) data showing China’s weakest annual economic growth in 28 years. However, the data was in line with expectations so the impact has been fairly limited. See data section below for other Chinese releases out earlier.
Base metals on the SHFE were broadly higher, but gains were somewhat limited as a result of the recent China data. Tin was the lone metal in negative territory.
Nickel registered the largest gain during morning trading with the metal’s most-traded May contract rising to 94,790 yuan ($13,983) per tonne, a gain of 0.8% or 710 yuan per tonne from last Friday’s close.
This firm showing by nickel follows another decline in SHFE nickel stocks last week; nickel stocks at SHFE-listed warehouses fell by 4% or 582 tonnes to 13,884 tonnes.
“The underlying fundamentals are likely to remain supportive; the International Nickel Study Group forecast the refined nickel market to record a further 33,000-tonne deficit in 2019 after the 118,700-tonne deficit in January-October 2018,” Fastmarkets analyst James Moore said.
