(MB) Base metals prices on the Shanghai Futures Exchange were predominantly down during Asian morning trading on Tuesday January 22, with the complex reversing the previous day’s gains. Tin, as was the case on Monday, bucked the trend – but this time to the upside. In a reversal of Monday’s moves, most SHFE base metals prices weakened after market sentiment turned more bearish on renewed concerns of a slowdown in the world’s second-largest economy – exhibited in Chinese data on Monday that showed the country’s gross full-year 2018 gross domestic product (GDP) grew at 6.6%, the slowest since 1990. Sentiment suffered further overnight after the International Monetary Fund (IMF) downgraded its forecast for global growth for 2019, the second such reduction in three months. The latest forecast now stands at 3.5%, down from 3.7% last October.

“Downgrades within the Eurozone, to France and Italy but more significantly Germany – Europe’s ‘growth engine’ – and by a chunky 0.6%, are largely responsible for the downgrade, as too Turkey in the Emerging Markets universe,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said.

“As well as the downgrade, the IMF sees the balance of risks to its outlook skewed to the downside, citing trade tariffs, a renewed tightening of financial conditions, a “no deal” Brexit and a deeper-than-anticipated slowdown in China,” Attrill added.

As a result this gloomier outlook, market sentiment has deteriorated and SHFE base metals prices have weakened. Tin has shown the most resilience against the challenging macroeconomic backdrop and was the only metal to secure any meaningful gains with a rise of 0.8%.

At the other end of the spectrum, aluminium recorded the biggest loss of the SHFE complex so far this morning; the light metal’s most-traded contract sliding to 13,435 yuan ($1,977) per tonne as at 10.03am Shanghai time, down by 100 yuan per tonne or 0.7% from Monday’s close.

Aluminium market participants continue to content with uncertainty surrounding when US sanctions against Russian aluminium producer UC Rusal may be lifted, and when the producer’s material may hit the market again.

In China, signs that the government’s “looser” aluminium winter cuts have had limited effect on curbing production are a further bearish factor for the light metal.