Most base metals prices on the Shanghai Futures Exchange staged a recovery during Asian morning trading on Thursday July 12, with only lead weakening. Nickel led the rebound with a 3.8% gain, while copper jumped by 1.2%. The other metals also logged gains in the early session, albeit at a more moderate pace, while lead bucked the general strength to fall by 0.2%. The firmer tone in the SHFE base metals complex comes after prices fell heavily on Wednesday amid an escalation in the trade spat between China and the United States, with the former threatening to impose fresh tariffs on $200 billion worth of Chinese goods. The flare up in trade tensions between the world’s two largest economies dented investor sentiment, causing the base metals to retreat on Wednesday. But prices have rebounded this morning, with some in the market suggesting that the move down was an overreaction to the trade war headlines and prices must now correct. “The SHFE base metals are correcting after the big falls on Wednesday, which were down to an overreaction in the market to [US President Donald] Trump’s plans for additional tariffs on China,” a Shanghai-based analyst told Metal Bulletin.“Concerns about a trade war hurting commodities are overdone, so expect prices to continue higher,” analysts with Goldman Sachs noted.
