Base metals prices on the Shanghai Futures Exchange were mixed during morning trading on Monday May 27, with a softer dollar and comments from US President Donald Trump suggesting a trade deal with China was still possible providing broad support to the complex.
"President Donald Trump on Friday said that Huawei, the Chinese telecommunications network company, was 'very dangerous' but could still be 'included' in a trade deal with Beijing," Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.
"Mr Trump said there remained a 'good possibility' that the negotiations with Beijing could get back on track and that he would met with Chinese President Xi at the Osaka G20 summit," Attrill added.
That said, deeper concerns over the negative effect that the US-China trade war is having on global economic growth continues to keep investors cautious.
Indeed, market participants will be keeping a close eye on China's manufacturing purchasing managers' index (PMI) data due Friday, with any sign of weakness expected to put further downward pressure on base metals prices.
The SHFE base metals prices were split into two camps this morning, with nickel and aluminium both up by 0.6%, while the rest were down between 0.1% for copper and 0.9% for zinc.
Aluminium's most-traded July contract rose to 14,320 yuan per tonne as at 9.54am Shanghai time, up by 80 yuan per tonne from Friday's close of 14,240 yuan per tonne.
The light metal has found support from news that a fire at China's Henan Shenhuo Group's primary aluminium smelter on Sunday could cause its 220,000-tonne capacity to be fully halted.
Other highlights
The dollar index was at 97.57 as at 9.57am Shanghai time, down from a two-year high of 98.38 on May 23. Nickel benefited from follow-through strength this morning, with the metal's most-traded July contract climbing to 100,620 yuan per tonne as at 9.54am Shanghai time, up by 630 yuan per tonne from Friday's close.In US data on Friday, durable goods orders were largely in line with expectations at -2.1% in April.There is no major data due today with US and UK markets closed for bank holidays.