“The ongoing coronavirus in China along with expectations of slower economic growth in the country has stirred up some risk-off sentiment, so the base metals have been on a largely downward trajectory recently. Thus, today’s performance is a reasonable correction,” an analyst based in Shanghai said on Wednesday.
“China has confirmed more than 300 cases of the virus, including six deaths, and there is the potential for further spread of the virus as people travel for Chinese New Year (January 24-30). While it is still early days, there is a risk that any outbreak could depress consumer sentiment and spending, including tourism as well as travel and transport related business,” Rodrigo Catril, currency strategist at National Australia Bank, said in a morning note.
In the base metals, tin has followed up its resilient performance on Tuesday
with some respectable percentage gains this morning.
The most-traded June tin contract rose to 140,120 yuan per tonne ($20,303) at the close of morning trading on Wednesday, up by 1,120 yuan per tonne or 0.8% from the previous day’s close of 139,000 yuan per tonne.
“The Chinese tin market faces supply tightness amid declining imports from Myanmar but demand is weak at the same time, so the tin price is expected to experience short-term fluctuations,” an analyst with China-based brokerage Jinrui Futures said.
The rest of the base metals were similarly up at the close of early session on Wednesday: March copper edged up by 0.1% to 48,480 yuan per tonne, March aluminum was up by 0.04% at 14,125 yuan per tonne, March zinc rose by 0.7% to 18,335 yuan per tonne, March lead was up by 0.8% 15,200 yuan per tonne and April nickel outperformed with a 0.9% rise to 108,330 yuan per tonne.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was up by 0.03% at 97.64 as at 11.30am Shanghai time.
- The Shanghai Composite Index was down by 0.23% at 3,045.03 as at 11.30 am Shanghai time.
- In European data on Tuesday, the United Kingdom’s average earnings index on a three-month moving average, compared with the same point a year earlier, was up by 3.2% in September-November 2019.
- Meanwhile, the UK’s unemployment rate held at 3.8% for the same period.
- Elsewhere, German think tank ZEW’s reading of economic optimism in Germany and the Europe stood at 26.7 and 25.6 respectively in January, both surpassing analysts’ forecasts quite significantly.