US President Donald Trump may not have immediately slapped tariffs on China and other countries on his first day in office but base metals bore a bit of the brunt of lingering concerns over a potential trade war.
The headline ANZ China Commodity Index dipped 0.2%, with industrial metals edging back 0.4% and energy dipping 0.7%.
ANZ Pacific Economist Kishti Sen says base metals declined as the threat of a trade war hurt market sentiment.
“US President Donald Trump warned that he is likely to enact import tariffs as high as 25% on Mexico and Canada by 1 February,” he says.
“The losses were limited as the risk of a broader global trade war with China eased.
“President Trump said that while he is considering a universal tariff on all foreign imports to the US, he was not ready for that yet.
“He also called for his staff to investigate whether Beijing had complied with a trade deal signed during his first term.”
Aluminium and zinc each retreated 1.7%, to US$2,646 ($4,218) and US$2,914 per tonne respectively, while nickel edged back marginally to US$16,078 per tonne.
“Nickel prices were little changed as the threat of a trade war was offset by the prospect of production cuts,” Sen notes.
“Indonesia is said to be considering cuts to nickel ore supplies to help boost prices amid a global glut.”
While Indonesian officials have not put a number on exactly how much production will likely be removed from the market, targeted production for 2025 is reportedly expected to be in the range of 150-200 million tonnes, down from 270 million tonnes last year.
Equities markets, however, continued to rise after Trump took office, with the S&P/ASX 200 advancing a further 20.7 points, or 0.25%, to 8,423.1 points as of 10.30am AEDT.
Over the last five days, the index has gained 2.55% and is currently 1.07% away from its 52-week high.
Sectors were mixed, with six of the 11 sectors opening higher on Wednesday (22 January). All of the sectors in the green made only minor movements in early trade, with information technology leading on a 0.1% tick up and having climbed 3.29% over the past five days.
Materials was the biggest loser, dipping 0.44% just after the opening bell. Industrials was up 0.09% and energy shifted up 0.06%.
The uranium miners led the S&P/ASX 200 top five this morning, with Paladin Energy (ASX:PDN) climbing 4.19% to $8.70 and Boss Energy (ASX:BOE) adding 3.19% to trade at $2.91.
Paladin gained ground on news that December 2024 recorded the highest monthly production
volumes since the restart of commercial production at its Langer Heinrich Mine (LHM) in Namibia.
Production for the quarter was in line with management expectations, with the LHM remaining
on track to meet the revised production guidance of 3-3.6 million pounds of uranium in the 2025 financial year.
The bottom five were all miners, including critical minerals producer Iluka Resources (ASX:ILU) sliding 8.27% to $4.88, aluminium giant Alcoa (ASX:AAI) wiping off 2.59% to trade at $62.07, lithium miners Pilbara Minerals (ASX:PLS) and Liontown Resources (ASX:LTR) sliding 2.26% to $2.39 and 2.13% to $0.69 respectively, and Lynas Rare Earths (ASX:LYC) retreating 2.18% to $6.73.
Iluka slid after it said 130 jobs would be cut to enable cost savings of around $20 million for 2025. The move follows a review of the miner’s cost base.
Full-year 2024 production of 496,000 tonnes of zircon, rutile and synthetic rutile beat guidance due to increased zircon in concentrate and a strong synthetic rutile kiln performance.
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 & Stock
