LIVE FUTURES REPORT 20/04: Most SHFE base metals reverse Thursday’s gains; tin prices supported

Aluminium and nickel have undergone a particularly steep pullback this morning following strong gains throughout the past week, sparked by supply concerns following the United States’ imposition of sanctions on Russian tycoon Oleg Deripaska’s assets, including UC Rusal.

This had in turn led to concerns in the nickel market due to Deripaska’s Rusal holding a 27.8% stake in Norilsk.

But the sanction-driven rally in nickel has seemingly run out of fuel with no signs yet of further US sanctions and a statement from Norilsk that it was “business as usual”, according to Sucden Financial.

Meanwhile, aluminium’s recent run of strength also suffered a setback following reports that the Russian government was considering coming to the aid of Rusal, ANZ Research said.

Adding further downside pressure to light metal prices was the news that Rusal officials were said to have met with Chinese companies and traders this week to discuss the possibility of buying alumina and selling aluminum in the Asian country.

Conditions in the aluminium market remain “nervous and choppy amid the overhanging uncertainty and with short-term direction likely to be headline driven,” Sucden Financial added.

The weaker tone in aluminium and nickel prices has spilled over into the rest of the complex this morning, but tin prices were in positive territory, albeit marginally, on supply concerns stemming from export issues in Indonesia.

Indonesia’s PT Timah, the world’s third largest tin smelter and the largest supplier of 99.9% consumer grade tin to the physical market, has not exported tin since March 20 due to an impasse over permitting, an informed source at the company told Metal Bulletin.

Base metals prices

• The most-traded June aluminium contract on the SHFE traded at 15,025 yuan per tonne ($2,393) of 11.00 am Shanghai time, down 355 yuan per tonne from Thursday’s close.
• The SHFE June copper contract price decreased 420 yuan to 51,520 yuan per tonne.
• The SHFE June lead contract price fell 60 yuan to 18,290 yuan per tonne.
• The SHFE June zinc contract price dropped 145 yuan to 24,385 yuan per tonne.
• The SHFE July nickel contract price retreated 2,840 yuan to 105,280 yuan per tonne.
• The SHFE September tin contract price edged up 350 yuan to 148,630 yuan per tonne.

Currency moves and data releases

• The dollar index was up 0.07% at 89.97 as of 11.00am Shanghai time – this compares with 89.63 at 11.55 am Shanghai time on Thursday.
• In other commodities, the Brent crude oil spot price rose 0.29% to $73.79 per barrel as of 11.55 am Shanghai.
• In equities, the Shanghai Composite increased 0.82% to 3,091.99 as of 10.45am Shanghai time.
• In US data on Thursday, the Philly Fed manufacturing index exceeded expectations at 23.2, while weekly unemployment claims stood at 232,000.
• The economic agenda is fairly light today with German producer prices and European Union consumer confidence of note.
• In addition, Bank of England Monetary Policy Committee member Michael Saunders, German Bundesbank President Jens Weidmann and US Federal Open Market Committee member John Williams are speaking.
• Day one of the International Monetary Fund’s spring meeting in Washington DC also gets underway today.