LIVE FUTURES REPORT 28/02: Resurgent dollar, disappointing China data send SHFE base metals prices lower

Base metals traded on the Shanghai Futures Exchange were down across the board during Asian morning trading on Wednesday February 28, with a firmer dollar and disappointing Chinese macro-economic data denting sentiment for the complex.

The most-traded April copper contract on the SHFE stood at 52,700 yuan ($8,350) per tonne as of 09.57am Shanghai time, down by 670 yuan from the previous day’s close.

Renewed strength in the dollar overnight has weighed on base metals prices this morning.

Following an upbeat maiden testimony from US Federal Reserve chairman Jerome Powell to Congress on Tuesday, the dollar rallied to a high of 90.5 overnight - its highest since February 9. The index was recently at 90.37.

In the testimony, Powell indicated the possibility of an increase in the median dot plots from three to four rate hikes this year at the upcoming US Federal Open Market Committee meeting on March 21.

“Powell’s testimony was viewed on the hawkish side compared to the prepared Monetary Policy Report… The dollar rallied and commodities fell,” ANZ Research noted on Wednesday.

Adding to the downbeat mood this morning were the disappointing releases of China’s manufacturing and non-manufacturing purchasing managers’ indices (PMI) for January.

China’s manufacturing PMI came in at 50.3 in February, which was below both expected and previous prints of 51.2 and 51.3 respectively.

Meanwhile, the country’s non-manufacturing PMI also slowed, coming in at 54.4 in February, down from 55.3 previously.

China’s National Bureau of Statistics attributed the decline to the traditional lull ahead of the Lunar New Year holiday (February 15-21).

Other base metals lower
  • The SHFE April aluminium contract price dipped by 40 yuan to 14,245 yuan per tonne.
  • The SHFE April zinc contract price dropped by 310 yuan to 26,350 yuan per tonne.
  • The SHFE April lead contract price declined 105 yuan to 19,395 yuan per tonne
  • The SHFE May tin contract price fell by 50 yuan to 148,200 yuan per tonne.
  • The SHFE May nickel contract price slipped 1,200 yuan to 104,800 yuan per tonne.

Currency moves and data releases
  • The dollar index was down by 0.1% at 90.37 as of 09.57am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down by 0.13% to $66.21 per barrel as of 09.57am Shanghai time.
  • In equities, the Shanghai Composite fell by 0.83% to 3264.81 as of 10.36 am Shanghai time.
  • In US data on Tuesday, durable goods orders fell by more than expected with a 3.7% decline. A 2% fall had been called for. Meanwhile, the country’s CB consumer confidence index rose to 130.8 in February, against an expected print of 126.2.
  • The economic agenda is busy today with EU core consumer price index estimates as US data that includes preliminary gross domestic product, Chicago PMI, pending home sales and crude oil inventories.

LME snapshot at 01.57am London time
Latest three-month LME Prices
  Price ($ per tonne)  Change since yesterday's close ($)
Copper 7,018 -3
Aluminium 2,147.50 0.5
Lead 2,584 8
Zinc 3,479 -8
Tin 21,690 -35
Nickel 13,795 -50
SHFE snapshot at 09.57am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne)  Change since yesterday's close (yuan)
Copper  52,700 -670
Aluminium 14,245 -40
Zinc 26,350 -310
Lead 19,395 -105
Tin  148,200 -50
Nickel  104,800 -1,200

Changjiang spot snapshot on Februray 28
  Range (yuan per tonne)  Change (yuan)
Copper  52,420 —52,440 -490
Aluminium 14,010 — 14,050 80
Zinc 26,300 —27,100 -300
Lead 19,200 —19,400 -250
Tin  146,000—148,500 250
Nickel  104,150 —104,350 -200

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