LIVE FUTURES REPORT 27/02: LME base metals remain firm; more cancellations for aluminium

The three-month aluminium price was $20 higher as it pushed back above $2,150 per tonne after further cancellations at LME-listed warehouses. 24,900 tonnes was cancelled in Port Klang, this morning, with an additional 9,900 delivered out of the same location.

This follows a 57,825-tonne cancellation of aluminium on Monday from warehouses in Johor, Port Klang and Rotterdam. But the aluminium benchmark spread remains in significant backwardation.

“Spreads on all metals are staying tight generally reflecting the availability of stock and the fact that going back two to three months the markets were seeing very regular selling from some funds and those shorts are now starting to come around to prompt,” Malcolm Freeman of Kingdom Futures said.

The cash/three-month aluminium spread is at $25.75 per tonne backwardation – with tom/next at $10.25 backwardation.

It was a similar story for zinc, with the benchmark spread at $38.25 per tonne backwardation with stocks continuing to decline. The three-month price remains firm at $3,534.50 per tonne.

While nickel prices were trading back above $14,005 per tonne this morning as the metal continues to push higher on the weaker dollar.

“Base metals prices are generally holding up well, with zinc and nickel prices all in high ground and well placed to challenge recent highs,” Metal Bulletin senior analyst William Adams said.

“Our view remains bullish, given concerted global growth and supply restraints following the past five years of reduced producer capex, but for now prices seem in no rush to break higher,” he added.

Base metals prices

• The three-month copper price was up $17 compared to Monday’s 5pm close price at $7,127 per tonne. Stocks declined a net 1,150 tonnes to 330,425 tonnes.
• Aluminium’s three-month price was $20 higher at $2,158 per tonne. Inventories declined 8,450 tonnes with a net cancellation of 23,425 tonnes.
• The three-month nickel price increased $80 to $14,005 per tonne. Stocks dipped 408 tonnes to 335,586 tonnes.
• Zinc’s three-month price was $3 higher at $3,534.50 per tonne. Inventories fell 2,425 tonnes to 135,800 tonnes.
• The three-month lead price dipped $0.50 to $2,579.50 per tonne. Stocks were 175 tonnes lower at 112,875 tonnes.
• Tin’s three-month price declined $35 to $21,590 per tonne. Inventories fell 100 tonnes to 1,785 tonnes.

Currency moves and data releases

• The dollar index was 0.12% lower at 89.76.
• In other commodities, the Brent crude oil spot price was down 0.27% to $67.36 per barrel.
• Data today includes US core durable goods orders and CB consumer confidence.
• In addition, German Bundesbank president Jens Weidmann and US Federal Reserve president Jerome Powell are speaking.
• “Today sees a massive amount of financial data from the USA and for now the indications are mixed just as the results from yesterday’s numbers were and if they turn out to be the same mixed bag prices would be exposed to downside pressure in the short term,” Freeman added.