SHANGHAI, Jan. 11 (SMM) – The National Bureau of Statistics announced that China’s CPI rose 2.5% in December, compared with the 2.0% growth in November. China’s PPI in December dropped 1.9%, with the decline narrowing from the previous month. Base metals edged down as the data were within expectation.
As economic data released Thursday night were relatively optimistic, base metals on LME saw general increase, driving domestic metals prices to start higher on Friday. However, the less brisk activity in LME nickel and tin markets at the tail of trading may not help support metals markets in China.
Although the interest rate policies announced by the Bank of England and the European Central Bank Thursday were in line with market prediction, it was out of expectation that the decision was passed unanimously by all members. This has cooled market anticipation for the European Central Bank to cut interest rate, driving up the euro. However, base metals prices were little affected although the US dollar index dropped below 80.
With all influential economic data and news released, domestic metals prices started to fall, which is certainly not a positive signal. Given the high metal inventories and poor downstream orders, SMM believes any increase in base metals will be limited if no more important favorable news is reported.