Base metals prices on the Shanghai Futures Exchange exhibited mixed movements during morning trading on Tuesday September 10 while the complex reacts to global economic growth concerns and China relaxing its monetary policy.
China’s disappointing trade data for August, with exports unexpectedly down 1% year on year, weighed on market sentiment at a time when trade tensions between the world’s top two economies continue to simmer.
This put pressure on the base metals sector, but a decision by the People’s Bank of China last week to cut the reserve requirement ratio by 50 basis points to its lowest level since 2007 provided a boost to sentiment, with the move expected to free up around 900 billion yuan ($126 billion) in liquidity.
As a result, the SHFE base metals were split into two camps with moves fairly limited in either direction.
Nickel, however, remained the best performer of the complex, with its most-traded November contract trading at 143,620 yuan per tonne as at 9.44am Shanghai time, up by 2,150 yuan per tonne – or 1.5% – from a close of 141,470 yuan per tonne on Monday.
Confirmation that Indonesia’s ban on nickel ore exports will come into effect from next year – two years earlier than expected – remains the major driver behind the strength in nickel prices.
Fastmarkets’ Asian Nickel conference kicks off in Jakarta, Indonesia, on Wednesday, where focus will likely be on developments surrounding the export ban.
In copper, prices were little changed to slightly firmer this morning, with the most-traded November contract at 47,460 yuan per tonne as at 9.44am Shanghai time, up by just 40 yuan per tonne – or 0.08% – from a close of 47,420 yuan per tonne on Monday.
“Copper is struggling to keep its head above water after China’s disappointing trade data,” a Chinese broker said.
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