LIVE FUTURES REPORT 14/05: Easing trade tensions, weaker dollar support most SHFE base metals prices

Base metals prices on the Shanghai Futures Exchange were broadly higher during Asian morning trading on Monday May 14, with the exception of aluminium and zinc, amid easing trade tensions between the United States and China, and a weaker dollar.

Leading the pack was lead, with the most-traded July contract on the SHFE traded at 19,105 yuan ($3,015) per tonne as at 11.10am Shanghai time, climbing 310 yuan per tonne from last Friday’s close. Around 25,000 lots of the contract have changed hands so far this morning.

“Domestic lead stocks remain tight, and with the peak operating period of battery factories in June, supply could tighten further,” China’s Ruida Futures said late last Friday. The broker suggested clients consider buying in at around 19,100 yuan per tonne.

On the trade front, US President Donald Trump tweeted on Sunday that he was working with Chinese President Xi Jinping to help Chinese telecom company ZTE Corp, which had suspended its main operations earlier this month, “get back into business fast”. The US had imposed a ban on American companies supplying ZTE after the Chinese firm was found to have violated US export restrictions by illegally shipping US goods to Iran.

Trump’s remark was seen as a thawing in trade relations between the two countries, ahead of a second round of discussion between the two countries’ top officials over trade disputes in the US capital of Washington DC this week.

The dollar index has eased after hitting as high as 93.42 on May 9, the highest since December 25, 2017. It was at 92.42 as at 11.03am Shanghai time, down 0.15% from its previous closing price.

Base metals prices

  • The SHFE July copper contract price increased 90 yuan per tonne to 51,530 yuan per tonne.
  • The SHFE July aluminium contract price fell 20 yuan per tonne to 14,650 yuan per tonne.
  • The SHFE July zinc contract price dipped 120 yuan per tonne to 23,575 yuan per tonne.
  • The SHFE Sept tin contract price increased 170 yuan per tonne to 145,760 yuan per tonne.
  • The SHFE July nickel contract price gained 1,500 yuan per tonne to 105,420 yuan per tonne.

Currency moves and data releases

  • The dollar index has eased after hitting as high as 93.42 on May 9, the highest since December 25, 2017. It was at 92.42 at 11.03am Shanghai time, down 0.15% from its previous closing price.
  • In other commodities, the Brent crude oil spot price fell 0.29% to $76.73 per barrel as at 11.04 am Shanghai.
  • In equities, the Shanghai Composite rose 0.55% to 3,180.59 as at 11.04 am Shanghai time.
  • In data on Friday, China’s M2 money supply rose 8.3% in April, which was close to expectations, while April new loans in the country bested forecasts at 1.18 trillion yuan. In US data, preliminary University of Michigan (UoM) consumer sentiment for May was close to forecast at 98.8, while preliminary UoM inflation expectations came in at 2.9% during the same month.
  • It is a quiet day for economic data today but a slew of Chinese data including fixed asset investment and industrial production is due on Tuesday.

 

SHFE snapshot at 11.10 am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since previous session’s close (yuan)
Copper (Jul) 51,530 90
Aluminium (Jul) 14,650 -20
Zinc (Jul) 23,575 -120
Lead (Jul) 19,105 310
Tin  (Sep) 145,760 170
Nickel  (Jul) 105,420 1,500

 

LME snapshot at 04:11am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since previous session’s close ($)
Copper 6,929 -13
Aluminium 2,283.50 -4.5
Lead 2,379.50 34.5
Zinc 3,079.50 -4.5
Tin 21,000 25
Nickel 14,090 35

 

Changjiang spot snapshot on May 14
  Range (yuan per tonne) Change (yuan)
Copper  51,180-51,220 60
Aluminium 14,460-14,500 -120
Zinc 23,680-23,730 -140
Lead 19,600-19,800 500
Tin  144,000-145,500 0
Nickel  105,150-105,450 700