Base metals prices on the Shanghai Futures Exchange were mostly down during the morning trading session on Wednesday on November 27, with only copper and zinc registering slight gains.
The lackluster performance by the SHFE base metals this morning comes despite more positive news over an initial trade agreement between the United States and China.
US President Donald Trump said on Tuesday that the US and China are close to an agreement on the first phase of a trade deal. This comes after
top trade officials from both countries spoke by telephone earlier that same day and agreed to keep working on resolving the protracted tariff war.
But as was the case on Tuesday, the base metals are not showing much of a reaction to trade-related news.
"US-China trade news is still dominating headlines, but markets are becoming desensitized amid lack of concrete new news," Rodrigo Catrill, currency strategist at National Australia Bank, said.
That said, copper has found support from strong US housing figures released overnight.
"Better-than-expected housing data in the US eased concerns of weaker demand. US new homes sales posted their best two months in more than 12 years. Single family house sales ran at a 733,000 annualized pace in October. This helped push copper prices higher," ANZ analyst Daniel Been said in a morning note.
As a result, the most-traded January copper contract rose to 47,310 yuan ($6,724) per tonne as at 9.56am Shanghai time, up by 240 yuan per tonne - or 0.5% - from Tuesday's close of 47,070 yuan per tonne.
The upbeat performance in copper also mirrors its performance on the London Metal Exchange on Tuesday, when the red metal's three-month price breached $5,900 per tonne to
close 1% higher at $5,924 per tonne.
Additionally, copper's fundamentals remain strong.
The International Copper Study Group (ICSG) estimates the refined copper market was in a deficit of 330,000 tonnes in the first eight months of 2019, larger than the deficit of 268,000 tonnes in the same period of 2018.
"We expect copper prices to move higher in the weeks ahead, chiefly driven by stronger fundamentals," Fastmarkets analyst Boris Mikanikrezai said.
"We argue that the fundamentals of the refined copper market should continue to improve in the months ahead, which will lead to a further drawdown of visible inventories," he added.
Zinc was the only other SHFE base metal to register a gain this morning, with its most-traded January contract inching up 50 yuan per tonne - or 0.3% - to 18,025 yuan per tonne.
The rest of the complex was down, however.
January aluminium inched down by 30 yuan per tonne - or 0.2% - to 13,725 yuan per tonne, January lead edged down vby 60 yuan per tonne - or 0.4% - to 15,300 yuan per tonne while January tin slipped by 90 yuan per tonne - or 0.06% - to 138,550 yuan per tonne. February nickel decreased by 750 yuan per tonne - or 0.7% - to 113,420 yuan per tonne.
Other highlights
The Shanghai Composite index was down by 0.04% at 2,905.93 as at 10.45am Shanghai time.The dollar index, which gauges the strength of the US currency against a basket of foreign currencies, stood at 98.32 as at 9.56am Shanghai time - this after a rebound from 97.81 on November 22.In US data on Tuesday, the goods trade deficit narrowed to $66.5 billion in October from $71.3 billion previously, the Conference Board confidence index was below expectations at 125.5 (versus the forecast 126.9) and the Richmond manufacturing index disappointed with a reading of -1.It is a busy day for data on Wednesday with US releases that include durable goods orders, preliminary GDP, unemployment claims, Chicago purchasing managers' index, the PCE price index, pending home sales and the Federal Reserve's beige book.