(FM) Base metals prices on the Shanghai Futures Exchange were broadly down during Asian morning trading on Thursday November 22 despite the recent softness in the dollar; copper and aluminium were little changed with a slight upward bias, while the rest were lower across the board. Investor sentiment in commodity markets has improved slightly amid the weaker dollar of late, driven by expectations that US Federal Reserve may pause its rate increase cycle, according to ANZ Research. The dollar index hit a low of 96.04 on Tuesday, down from the peak of 97.70 reached on November 12. It was recently at 96.69 as at 9.54am Shanghai time. That said, the weaker US currency seems to be providing little in terms of support to SHFE base metals prices, which continue to come under pressure from fears surrounding simmering trade tensions between China and the United States and the wider effects that a prolonged spat may have on global economic growth.
Elsewhere, copper and aluminium were the best performers of the SHFE base metals complex this morning, managing to record gains – albeit marginal ones at the time of writing.
The World Bureau of Metal Statistics has made note of delayed Chinese trade data, which has indicated a 5% rise in copper demand from January to September this year.
“The International Copper Study Group also released data showing the market was in a deficit of 260,000 tonnes in the first eight months of the year. This compares with a deficit of 98,000 tonnes over the same period last year,” ANZ Research said.
“Copper prices appear more constructive because tightening availability has emboldened bullish sentiment,” Fastmarkets analyst James Moore said. “While upside price risks remain, wider risk-off sentiment continues to overhang. Nonetheless, we maintain that, in view of the supportive fundamentals, prices are well placed to rebound should risk-on sentiment return.”
The most-traded January copper contract price rose to 49,420 yuan per tonne as at 9.56am Shanghai time, up 10 yuan per tonne from Wednesday’s close.
Aluminium recorded a similarly small gain, with the metal’s most-traded January aluminium contract ticked up by 10 yuan per tonne to 13,755 yuan per tonne.
