SHANGHAI, Feb. 19 (SMM) –Stock market plunged across the world during Chinese New Year holiday while gold prices surged, dragging down commodity prices. Expectation for rate hike by US Fed weakened this week and Europe called on G20 seek for collaboration. US dollar thus tumbled. China’s trade data for January far missed expectation with CPI growth accelerating PPI falling for 47 straight months. M2 growth hit a 19-month high in January and new RMB loans also recorded a high of RMB 2.51 trillion.
Base metals bounced back from lows after reopening following Chinese New Year holiday. SMMI edged down 0.86% with aluminum and zinc performing best.
SMMI.Al soared by 1.34%. SHFE aluminum led the gains by over 2.5% due to growing longs and growth in aluminum inventories during the week-long holiday were less than half of those in 2015. Traders rushed to enter market while downstream buyers stayed quiet. SMMI.Zn initially dropped but later bounced back by 0.1%. LME nickel plunged 11% during holiday and rebounded by 8% after the holiday with improved market sentiment. SHFE nickel rallied by 3.6% this week. In domestic nickel market, traders hunted for cheap goods but turned unwilling to buy when SHFE nickel rally met resistances, curbing transactions. SMMI.Ni tumbled 3.03%, followed by copper and tin.
SHFE copper hovered between moving averages and spot discounts widened because of growing supply in imported copper. SMMI.Cu saw a loss of 1.48%. Some tin smelters resumed supply and cut price offers to push trading. Few downstream buyers entered market. SMMI.Sn fell by 1.47%.
SMMI.Pb dropped by 1.05%. Markets expected downstream demand to recover after Chinese Lantern Festival and longs are eager to enter market, fueling bullishness in market.
