Investors remain focused on the spread of the virus, which causes the disease Covid-19, while the number of infected continues to grow at an alarming rate. Italy in particular has seen a sharp increase in the number of coronavirus cases in the country, with authorities reporting a total of 400 late on Wednesday – an increase of 25% from a day earlier.
Also on Wednesday, the World Health Organization said that for the first time the virus was spreading faster outside China, where it originated.
“News around Covid-19 and its spread and knock-on impact on the world economy dominate…The base metal sector was mixed as it tried to digest still positive fundamentals against the worsening macro backdrop,” David Plank, head of Australian economics at ANZ, said in a morning note.
Meanwhile, reports that China’s central bank has pledged 500 billion yuan ($71 billion) to ease financing for small businesses amid the ongoing coronavirus outbreak in the country have so far done little to offset the wider concerns of the virus’ impact to Chinese economic growth.
As a result, the SHFE base metals put in an overall weak performance this morning. Lead was the worst performer of its peers, with a drop of 0.41% or 60 yuan per tonne to 14,500 yuan per tonne from its close on Wednesday.
In addition to the broad macro concerns, the heavy metal has also seen steady inflows of cargoes into SHFE-listed sheds in recent weeks.
SHFE lead stocks rose for the third week in a row on February 21, to total 38,766 tonnes. This is 40.6% higher than the 27,566 tonnes recorded on January 23 – the final trading day before China’s Lunar New Year break.
Losses were also observed in April nickel (-0.37%) to 13,440 yuan per tonne, April copper (-0.11%) to 45,580 yuan per tonne and June tin (-0.16%) to 135,680 yuan per tonne.
But nickel and zinc managed to eke out marginal gains over the morning; the June nickel contract rose by 0.29% to 101,310 yuan per tonne, while the April zinc contract ticked up by 0.27% to 16,500 yuan per tonne.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.15% at 98.97 as at 11.30 am Shanghai time.
- The Shanghai Composite Index was up by 0.57 % at 3,004.99 as at 11.30 am Shanghai time.
- In US data on Wednesday, US January new home sales annualized rate expanded to 764k on February from a revised 708k last month, signaling an economy expansion behind the more house buying in the past one month.
- In data from the United States on Wednesday, new home sales were at a seasonally adjusted rate of 764,000 units in January, exceeding the expected 714,000 units. US crude oil inventories rose by a smaller-than-projected 500,000 barrels in the week to February, lower than the forecast 2.3-million-barrel rise.
- There is a host of US data out on Thursday including goods orders, preliminary gross domestic product, unemployment claims and pending home sales.