(FM) Base metals prices on the Shanghai Futures Exchange were predominantly higher during Asian morning trading on Wednesday January 16, with the complex continuing to find support from Chinese authorities’ pledge to slash taxes as part of a new stimulus drive. On Tuesday, China signaled its intent to introduce fresh stimulus measures in the near term to address the increasing downward pressure on its economy. The measures included lower value added tax rates for select industries and tax rebates for others. The stimulus news eased concerns over a downswing in the world’s second-largest economy and helped to boost risk sentiment across commodities markets. Base metals similarly have benefited from this renewed positivity this morning, with prices on the SHFE, barring those for lead and tin, up across the board.

Nickel led the complex higher with an increase of 1%. This morning’s strength following similar gains for the London Metal Exchange’s three-month nickel price on Tuesday; the three-month LME nickel price ended trading on Tuesday $285 per tonne higher at $11,675 per tonne.

The most-traded May nickel contract on the SHFE stood at 93,050 yuan ($13,757) per tonne as at 10.11am Shanghai time, up by 980 yuan per tonne from Tuesday’s close.

“Nickel led the sector higher, with investors betting that demand in China will be boosted by strong growth in the electric vehicle sector,” ANZ Research said in a morning note.

Copper, aluminium and zinc recorded more marginal gains during Asian morning trading on Wednesday, while lead continued its downward trend due to weak seasonal demand and the disappointing performance of automobile sales.

“Downstream indicators continue to weaken, particularly slowing momentum in vehicle sales. Global light vehicle sales declined by 6.9% year on year in December 2018, according to LMC Automotive. Global sales totaled 94.8 million vehicles in 2018, down 0.5% year on year as a result, their first annual contraction since 2009,” Fastmarkets analyst James Moore said.

In China, overall vehicle sales fell by 2.8% to 28.08 million units in 2018, from 28.88 million units in the prior year, according to data from the China Association of Automobile Manufacturers (CAAM). It was the first decline since 1990. China produced 27.81 million vehicles last year, down 4.2% from a year earlier.