(MB) An escalation in geopolitical tensions over the weekend dampened sentiment during Asian morning trading on Monday April 16 with the base metals traded on the Shanghai Futures Exchange broadly down. Aluminium showed the most resilience during the early session in Asia, with participants continuing to focus on the United States’ sanctions on aluminium producer UC Rusal and how the potential loss of supply from the Russian company might affect the global market. The most-traded June aluminum contract on the SHFE traded at 14,575 yuan ($2,323) per tonne as of 11.14 am Shanghai time, down by 5 yuan from Friday’s close. “Traders remain on edge as the as the impact of the sanctions continues to play out,” ANZ Research noted on Monday. “Cancelled warrants – orders to remove metal from [London Metal Exchange] warehouses – rose by 35% to 370,000 tonnes on Friday as panic buying continued,” it added.On Friday, Rio Tinto said it was declaring force majeure on some of its contracts after reviewing its arrangements with Rusal in light of US sanctions on the Russian aluminium producer. The rest of the complex was lower, driven mainly by heightened geopolitical tensions following a US-led missile strike in Syria last Friday, but losses have been fairly limited. The strikes, carried out in conjunction with the United Kingdom and France, were intended to serve as a deterrent against chemical weapons.The airstrikes on Friday „have thus far drawn only verbal condemnation from Russia… with Russia’s prediction of ‚global chaos‘ if the West hits Syria again not filling markets with fresh dread, at least judging from the limited foreign exchange market movements evident in the first two hours of the new trading week,“ Ray Attrill, head of foreign exchange strategy at National Australia Bank, said on Monday. Meanwhile, tensions related to a trade spat between the US and China, the world’s two largest economies, appeared to fade after dominating headlines in recent weeks. „There is some evidence that both sides have somewhat backed down slightly after [Chinese President] Xi [Jinping] championed free trade at Boao Forum and Trump expressed optimism that a trade deal might eventually be agreed,“ Zhu Huani, an economist at Mizuho Bank, said.

 

Cookie Consent Banner von Real Cookie Banner