Also supporting market sentiment this morning were the strong December 2019 trade figures released by China’s General Administration of Customs on Tuesday.
While China’s trade volume for the whole of 2019 shrank by 1%, with exports expanding by 0.5% and imports contracting by 2.8%, both imports and exports accelerated in the final month of last year due to improving manufacturing activity and positive developments in US-China trade relations. Chinese goods exports grew by 7.6% year on year in December 2019, while imports rose by 16.3% over the same comparison.
“Strong Chinese imports as well as phase one of the US-China trade deal boosted market sentiment across commodity sectors. Higher imports of soybeans and pork in December suggested that China is fulfilling its commitment to buy more US agricultural goods,” ANZ Research analyst Felicity Emmett said in a morning note.
But the positivity was tempered this morning following overnight reports that existing tariffs on billions of dollars of Chinese goods coming into the US are likely to remain in place until after the US presidential election in November.
As a result, gains across the SHFE base metals were limited. Tin was the outperformer of the complex with a rise to 139,870 yuan ($20,270) per tonne at the close of the morning session, up by 1,630 yuan per tonne - or 1.2% - from a close of 138,240 yuan per tonne on Tuesday.
Elsewhere, March lead rose by 0.8% to 15,030 yuan per tonne, March nickel rose by 0.2% to 109,160 yuan per tonne, March zinc was up by 0.2% at 18,215 yuan per tonne and March aluminium edged up by 0.1% to 13,950 yuan per tonne.
Copper was the lone metal in negative territory with a drop of 20 yuan per tonne to 49,140 yuan per tonne in its most-traded March contract.
The most-traded March nickel contract closed Tuesday’s morning trading session at 109,160 yuan ($15,594) per tonne, up by 260 yuan per tonne - or 0.24% - from Tuesday’s close of 108,900 yuan per tonne.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.01% at 97.37 as at 11.30am Shanghai time.
- The Shanghai Composite Index was down by 0.63% at 3,087.09 as at 11.30 am Shanghai time.
- In data on Wednesday, consumer and producer price figures from the United Kingdom and US are scheduled, as are the European Union’s industrial production and trade balance.
- Other US data of note includes Empire State Manufacturing Index and crude oil inventories.