Help Desk -
9717405332, 9599714297, 9810335381
Email
Password

Uncertainty about global growth hits metal prices

Metal News - Published on Mon, 18 Mar 2019

Image Source: The Hindu Business Line
Reuters reported that most industrial metals prices fell on Friday as uncertainty about trade talks and global growth outweighed Chinese plans to use government levers to underpin growth. News of a tax cut for China's industrial sector sent zinc prices and spreads lurching in Shanghai.

Premier Li Keqiang promised broad policy steps to prevent a sharper slowdown for the world's second-biggest economy, the biggest consumer of base metals.

Mr Xiao Fu, head of commodity market strategy at Bank of China International in London said that “I think that has helped to stabilise the sentiment and calm the market, but there is still some macro uncertainty lingering, so we're not seeing a massive rally in the metals prices. Although the trade talks are progressing, we still don't know the outcome and there's some worry about the general weaker global GDP outlook.”

Benchmark aluminium on the London Metal Exchange fell into the red and traded down 0.7 per cent to USD 1,890 a tonne in official open outcry activity. It earlier touched USD 1,914, the strongest since March 4.

Zinc prices fluctuated wildly and Shanghai Futures Exchange spreads ballooned after Li said a planned cut in value-added tax on China's manufacturing sector, which includes non-ferrous metals, would take effect from April 1. Some speculators on the ShFE had previously bet that the planned cut in VAT would be implemented on May 1, increasing the backwardation on metals, including copper and aluminium.

The backwardation between the March and April ShFE copper contracts spiked to over 1,000 yuan a tonne, the highest since May 2014, after Li's comments. The spread between April and May, previously in a steep backwardation, immediately flipped into a deep contango.

Source :

Posted By : Rabi Wangkhem on Mon, 18 Mar 2019
Related News from Metal segment