The ASX remains under pressure but the prospect of the injection of further stimulus into the Chinese economy has provided tailwinds for base metals.
The S&P/ASX 200 dropped a further 36.1 points, or 0.44%, to 8,105 points, as of 10.30am AEDT. The index has wiped off nearly 2% in the past five days.
Materials, however, gained 0.48% but is still 1.1% lower over the past five days and industrials shifted up 0.08%. Energy edged back 0.04%.
The headline ANZ China Commodity Index lifted 0.4% after Premier Li Qiang announced the economic growth goal for 2025 is still expected to be “about 5%”.
Aluminium advanced 1.6% to US$2,659 ($4,196) a tonne, copper rose 2.6% to US$9,585 a tonne and zinc rallied 2.4% to US$2,879 a tonne.
ANZ Head of Australian Economics Adam Boyton says China’s unchanged growth target signals authorities are confident about the domestic outlook.
“However, expectations rose that the government will be required to implement more stimulus measures to meet the target,” he says.
Copper received a further shot in the arm after US President Donald Trump said in his speech to Congress overnight that the red metal could attract a tariff of 25%.
“Last week it was announced that the Commerce Department would undertake an investigation that may lead to tariffs on copper,” Boyton says.
“While this could take months, the comments suggested the levy had already been enacted. This saw copper prices on the New York-based Comex surge higher, widening the gap with London-based LME prices.
“The prospect of such a levy had already seen traders start moving physical metal into the US, but this latest event is likely to see that move accelerate.”
However, iron ore prices took a hit after China signalled moves to encourage the country’s steel industry to cut output.
Rio Tinto (ASX:RIO) was among the losers, retreating 2.16% to $114.96.
Copper miner Sandfire Resources (ASX:SFR) rallied 5.7% to $11.35, diversified producer Mineral Resources (ASX:MIN) climbed 3.42% to $21.80, Iluka Resources (ASX:ILU) rose 3.14% to $4.27 and Bellevue Gold (ASX:BGL) was up 2.86% at $1.26 in early trade.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & iStock
