Metal and oil prices rose on Wednesday following an announcement by China that it was to scrap import duties on copper, coal and aluminum, and halve tax on oil products from the beginning of next year reports the Financial Times.
Export taxes on some steel products, coking coal and coke will also be raised to curb profits on exports of polluting products, the finance ministry said on Wednesday.
Export taxes on semi-finished steel products will be raised to as much as 25 per cent and a 15 per cent export tax will be imposed on some stainless steel, welded pipes and other steel products in an effort to cool investment in the steel sector, the ministry added.
The London Metal Exchange was closed for the Boxing Day holiday, but speculation over Chinese demand in 2008 drove Shanghai copper futures 1.5 per cent higher to Rmb58,850 ($8,030) per ton. Shanghai aluminum was up 0.2 per cent to Rmb18,280.
Oil prices also climbed on China’s announcement, which will halve import duty on products like diesel and petrol.
Speculation over further inventory declines in the US when it releases weekly stockpile data on Thursday also supported crude prices. Nymex West Texas Intermediate was up 48 cents at $94.61 a barrel, while Brent crude added 58 cents to $93.28 a barrel.
On currency markets, the yen was undermined by increased appetite for risk as equity markets climbed, increasing the likelihood of renewed carry trade activity.
The yen remained near a seven-week low against the dollar at Y114.09 and fell 0.2 per cent against the Euro to Y164.68.
The Euro was stronger against both sterling and the dollar as traders continued to expect further interest rate cuts in the UK and the US, but a more hawkish stance by the European Central Bank.
Read it here: China to Scrap Import Duty on Metals