LIVE FUTURES REPORT 29/09: SHFE base metals higher amid short-covering ahead of China holiday

Base metals prices on the Shanghai Futures Exchange (SHFE) were all higher during the Asian morning trading session on Friday September 29 as shorts closed their positions ahead of China’s week-long National Day holiday next week.

The most-traded November copper contract on the SHFE traded at 51,360 yuan ($7,708) per tonne as of 03:43 BST, up by 740 yuan from Thursday’s close. Around 205,000 lots of the contract have changed hands so far, with open interest for the contract falling to around 150,400 positions from 161,250 positions at Thursday’s close.

“Short-covering had pushed SHFE copper higher during last night’s trading…the last day of trading before the holidays is likely to see more investors exit the market,” a Shanghai-based market observer said.

Commodities prices also earned a reprieve as a lack of further details on recent tax reform plans proposed by US president Donald Trump put a lid on the dollar’s recent climb.

Still, the increased possibility of a US rate increase at the end of the year is expected to continue providing support to the dollar, some market observers noted.

Meanwhile, China is already enforcing some restrictions on copper imports, cutting quotas and limiting the number of licences in some regions of the country, sources told Metal Bulletin, although a full ban on scrap copper imports has not yet been confirmed.

Rest of complex higher
  • The SHFE November zinc contract rose 130 yuan to 25,810 yuan per tonne.
  • The SHFE November aluminium contract price increased 65 yuan to 16,375 yuan per tonne.
  • The SHFE November lead contract price gained 245 yuan to 20,895 yuan per tonne.
  • The SHFE January nickel contract price jumped 1,280 yuan to 84,790 yuan per tonne
  • The SHFE January tin contract price edged up 70 yuan to 146,390 yuan per tonne.

Currency moves and data releases
  • The dollar index was up 0.06% to 93.22 as of 03:40 BST. It has eased after reaching as high as 93.67 on Thursday, the highest since August 18.
  • In other commodities, the Brent crude oil spot price rose 0.12% to $57.27 per barrel as of 03:39 BST.
  • In equities, the Shanghai Composite index was recently 0.29% higher at 3,349.33.
  • In US data on Thursday, final GDP for the second quarter came in at 3.1%, above the forecast of 3.0%. The GDP price index was as forecast at 1.0% while weekly unemployment claims at 272,000 were slightly above the expected 269,000. The goods trade balance at the end of August was -$62.9 billion, while preliminary wholesale inventories rose 1.0%.
  • Economic data due later today includes core PCE price index, personal spending, Chicago purchasing managers’ index (PMI), and revised University of Michigan consumer sentiment from the USA. China’s official manufacturing and non-manufacturing PMI, and Caixin manufacturing PMI for September, due on Saturday, will also be of note.
  • In addition, Bank of England governor Mark Carney and US Federal Open Market Committee member Patrick Harker is speaking later today.

SHFE snapshot at 1043 Shanghai time
Most traded SHFE contracts
  Price (yuan/t)  Change since yesterday's close (yuan)
Copper  51,360 740
Aluminium 16,375 65
Zinc 25,810 130
Lead 20,895 245
Tin  146,390 70
Nickel  84,790 1,280

LME snapshot at 0343 London time
Latest 3M  LME Prices
  Price ($/t)  Change since yesterday's close ($)
Copper 6,534 12
Aluminium 2,137.50 6.5
Lead 2,486 16
Zinc 3,137 -10
Tin 20,655 55
Nickel 10,460 20

Changjiang spot snapshot on September 28
  Range (yuan/t)  Change (yuan)
Copper  51,460-51,500 940
Aluminium 16,130-16,170 20
Zinc 26,350-26,400 250
Lead 21,500-21,700 100
Tin  143,500-145,500 0
Nickel  85,200-86,200 1,200

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