The firmer performance by the complex follows a recovery in market sentiment amid positive headlines surrounding the Covid-19 pandemic and a host of supply disruptions.
Market hopes were raised following news that there has been a slowdown in the reported rate of new infections across Europe, including hard-hit Italy, which signals that lockdown measures are proving to be effective and the pandemic may soon reach a peak.
Italian authorities reported 800 more Covid-19-related deaths on Monday but the number of new infections continued to slow; 4,050 new cases were confirmed on Monday, down from 5,217 on Sunday and 5,974 on Saturday. Italy has confirmed a total of 101,739 cases of coronavirus since the outbreak began.
Elsewhere, steps taken to contain the virus in North America have also led to an uptick in market sentiment this morning.
“Markets were encouraged by the US’s decision to extend lockdowns until 30 April, supported by the enormous fiscal and monetary support from the US Treasury and Fed. Canada has introduced an income policy, compensating 75% of income for employees of all firms up to C$58,700 ($40,616). Prime Minister Trudeau expects ‘firms to do the right thing’. Economic efforts are focused on bridging both household income and business cash flow,” Catherine Birch, analyst from ANZ Research, said in a morning note.
Meanwhile, news of production suspensions in line with the lockdown measures across a number of countries around the world are also lending support to commodity markets.
Major copper production hubs Peru and Chile recently announced a national state of emergency, causing producers in both countries to halt production
. Similarly, a coronavirus-related lockdown in India
has also seen Indian producers halt operations.
SHFE copper was the outperformer of its peers in terms of percentage gains. The most-traded May copper contract rose to 39,330 yuan ($5,561) per tonne at the close of morning trading on Tuesday, up by 1.6% or 610 yuan per tonne from Monday’s close of 38,720 yuan per tonne.
Gains were also seen in May aluminium at 11,580 yuan per tonne (+0.6%), May zinc at 15,190 yuan per tonne (+0.7%), May lead at 13,870 yuan per tonne (+0.9%) and June tin at 119,880 yuan per tonne (+0.9%). Nickel was the lone metal to record a loss, with the metal’s most-traded June contract falling by 220 yuan per tonne or 0.2% to 92,990 yuan per tonne.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was up by 0.11% at 99.32 as at 11.18am Shanghai.
- The Shanghai Composite Index was up by 0.42% at 2,758.81 as at 11.30 am Shanghai time.
- On Monday, China cut its seven-day repo rate by 20 basis points to 2.2%, likely signaling cuts to official policy lending rates in following days.
- In data on Tuesday, China’s official manufacturing purchasing manager’s index (PMI) for March came in at 52.0, beating the forecast of 44.9 and recovering significantly from the historical low of 35.7 in February, when the economy was heavily hit by the coronavirus outbreak. The official non-manufacturing PMI underwent a similar recovery, rising to 52.3 in March from 29.6 in February.
- Later, the United Kingdom’s final gross domestic product, German import prices and unemployment change and the European Union’s consumer price flash estimate are due.
- US releases of note on Tuesday include the Chicago PMI and Conference Board consumer confidence.