Base and bulk commodities remain under pressure but the losses aren't getting any larger, yet

Photo: Getty Images.

Chinese commodity futures are still under pressure on Wednesday, although it’s not all bad news. While they’re still down heavily, they haven’t added to their overnight losses. Yet.

After what’s been seen over the past few days, that’s almost a win, of sorts.

Here’s the scorecard at the mid-session break:

SHFE Copper ¥46,170 , -0.86%
SHFE Aluminium ¥14,405 , -1.97%
SHFE Zinc ¥20,840 , -3.11%
SHFE Nickel ¥78,780 , -2.56%
SHFE Rebar ¥2,896 , -1.03%
DCE Iron Ore ¥474.00 , -1.66%
DCE Coking Coal ¥1,062.00 , -4.50%
DCE Coke ¥1,545.00 , -5.33%

While most contracts are still trading around where they finished overnight trade, the selling pressure is still clearly intense, driven by concerns over supply-demand mismatches.

“Iron ore and industrial metals retreated yesterday on views that supply will outpace demand this year,” said Vivek Dhar, mining and energy commodities analyst at the Commonwealth Bank.

Dhar suggests that demand expectations in China — the world’s largest commodity consumer — have been pared back due to fears that policymakers will introduce tougher measures to cool the nation’s property sector.

“The concern stems from a 25% year-on-year expansion in mortgage lending in the March quarter despite government and central bank initiatives to reduce debt related to the sector. Tighter credit controls could pave the way for reduced construction activity,” he says.

“The downside risks are significant given that China’s property construction sector accounts for a major share of China’s steel and industrial metal usage.”

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