Base metals concluded the week with declines after Chinese regulators instructed major exchanges, including the Shanghai Futures Exchange, to remove high-frequency trading servers from data centres. ANZ analysts noted that this action dampened market sentiment, which had previously been supported by Chinese investor activity and significant speculative investments in copper and related metals throughout the year.
Traders also encountered renewed trade concerns following President Trump’s announcement of a 10 per cent tariff on goods from eight European countries, effective February 1, potentially increasing to 25 per cent in June. This increase hinges on whether Europe agrees to a deal that includes the purchase of Greenland. Data regarding rare earth trade revealed a decrease in China’s exports in December, heightening anxieties about supply chains.
ANZ reported that Beijing is intensifying oversight of shipments to Japan, necessitating more detailed documentation from exporters, following an earlier restriction on items considered to have potential military applications. However, tin prices resisted the broader market downturn due to a military crackdown on illegal mining operations in Indonesia, which has constrained supply. Nickel’s losses were moderated by expectations of reduced Indonesian output, as regulators intend to significantly reduce mining quotas this year to bolster prices.
