(MB) Base metals prices on the Shanghai Futures Exchange were mixed during morning trading on Monday March 11, with the complex reacting to the uninspiring Chinese economic data released over the weekend. With the exception of those for zinc, SHFE base metals prices were little changed on Monday morning; copper, tin and nickel recorded marginal gains while aluminium and lead fell slightly. The most-traded May copper contract on the SHFE stood at 49,050 yuan ($7,296) per tonne as at 10.40am Shanghai time, up 10 yuan per tonne from last Friday’s close.

This sideways trading in copper and indeed most of the other base metals follows the release of lackluster economic data from China last Saturday; China’s producer price index rose by 0.1% year on year in February, marking its slowest pace since September 2016, data from the National Bureau of Statistics (NBS) showed.

The 0.1% year-on-year increase in February was also below the 0.2% year-on-year rise that had been expected.

“China’s lower than anticipated PPI reading for February has made market participants concerned about the country’s possible weaker demand for commodities this year, which in turn has weighed on base metals prices,” a Shanghai-based macroeconomic analyst told Fastmarkets.

Meanwhile, China’s consumer price index (CPI) rose by 1.5% year on year in February, in line with forecasts, but down from January’s 1.7% year-on-year rise.

“China’s CPI reading for February marked the third consecutively increase of below 2%, indicating moderate levels of inflation in the country currently,” the analyst added.

In addition to the weak macroeconomic data from China, the red metal is also contending with rising stocks at SHFE warehouses and weaker physical demand, Chinese broker Guotai Junan said in a morning note.

Copper stocks at SHFE-listed warehouses rose by 9,120 tonnes to 236,169 tonnes last Friday. This compares with a total of 108,890 tonnes at the start of the year.

Meanwhile, Chinese trade data for February fueled concerns of weak demand for commodities from the country.

“China’s trade data for February proved weaker than expected, both in terms of imports and exports – particularly for copper,” Fastmarkets’ analyst Boris Mikanikrezai said.

Imports of unwrought copper and copper products for February dropped to 311,000 tonnes, down 35% month on month and down 12% year on year, according to China’s customs data.

Imports for January-February at 790,000 tonnes were flat on the year, reflecting subdued appetite at the start of the year.

“Physical premiums in China continue to fall, in part driven by soft downstream demand, which is incidentally consistent with the latest import data and the notable increase in domestic exchange inventories,” Mikanikrezai said.


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