Nickel was the worst performer of its complex over the morning, with the metal’s most-traded April contract dropping to 103,800 yuan ($14,866) per tonne, down by 1.3% or 1,410 yuan per tonne from Monday’s close of 105,210 yuan per tonne.
Losses were also observed in April zinc (-0.6%) at 17,165 yuan per tonne, June tin (-0.5%) to 134,820 yuan per tonne, April copper (-0.4%) to 46,300 yuan per tonne and April lead (-0.1%) to 14,430 yuan per tonne.
Aluminium bucked the weaker tone exhibited by the other SHFE base metals over the course of the early session, with the light metal’s April contract rising by 0.2% to 13,720 yuan per tonne.
The overall negative performance by the SHFE base metals comes despite further stimulus measures implemented by China on Monday; the People’s Bank of China (PBOC) lowered a key interest rate and injected more money into markets. The central bank will meet on Thursday to set its Loan Prime Rate, where a 5-basis-point cut is expected.
“It is clear both the government and PBOC are starting to warm up the stimulus engine. Expect more announcements in the coming week. As to whether the impending wave of stimulus merely keeps the economic lights on, or spurs that much hoped for V-shaped economic recovery depends though, entirely on the evolution of its coronavirus battle,” Jeffrey Halley, Oanda’s senior market analyst for Asia Pacific, said in a morning note.
With the economic agenda light on Monday and US markets closed in observance of Presidents’ Day, there was little for investors to take their cue from, which could be fueling the lackluster trade seen this morning.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was up by 0.03% at 99.18 as at 11.29am Shanghai time. This is little changed from a reading of 99.11 at a similar time on Monday.
- The Shanghai Composite Index was down by 0.39% at 2,972.02 as at 11.30 am Shanghai time.
- In data on Monday, Japan’s gross domestic product (GDP) shrank by an annualized 6.3% in the final quarter of 2019, marking the largest contraction in five years.
- Economic releases of note on Tuesday includes jobs data from the United Kingdom, Zentrum fur Europaische Wirtschaftsforschung’s (ZEW) reading of economic sentiment in Germany and the European Union as well as the United States’ Empire State Manufacturing Index and National Association of Home Builders (NAHB) Housing Market Index.