A temporary halt in U.S. China trade war provides a breather and lifts up the aluminium market

The leaders of the world's two largest economies, President Donald Trump and Chinese President Xi Jinping, met face-to-face on December 1 Saturday in Argentina, which was expected to temporarily halt an escalating tit-for-tat trade war. They agreed to a temporary trade cease-fire to allow time for more negotiations. This indicated that U.S. tariffs on US$200 billion worth of Chinese goods will not rise to 25 per cent from current 10 per cent on Jan1.

White House press secretary Sarah Huckabee Sanders said in a statement that adhering to the deal, China would buy "a very substantial amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries." 

London and Shanghai industrial metals also jumped on Monday after falling consecutively for a month to reach the level of August 2017. SHFE aluminium plunged to the two year’s lowest level last week. Anticipating a ceasefire in a trade dispute that has shaken global markets, the markets responded positively.

While LME aluminium rose 0.85%, SHFE aluminium advanced about 1.1%.

“It’s an incredible deal. It goes down, certainly — if it happens, it goes down as one of the largest deals ever made,” Mr Trump told reporters late Saturday night aboard Air Force One.

Both sides promised to try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days.