SHFE base metals higher; copper prices surge amid positive sentiment

Base metals prices on the Shanghai Futures Exchange (SHFE) were higher across the board during Asian morning trading on Tuesday October 24, buoyed by a weakening in the dollar and positive sentiment ahead of major industry conferences.

The most-traded December copper contract on the SHFE was at 55,670 yuan ($8,387) per tonne as of 03:44 BST, up 1,280 yuan from Monday’s close, with around 202,000 lots of the contract having changed hands so far.

Other than a decline in the dollar since Monday, market observers also cited positive sentiment in the market ahead of major industry conferences, stricter regulations over scrap imports in China and lower London Metal Exchange copper stocks as providing support for red metal prices.

“There is upside for copper prices possibly up till early November as the upcoming industry conferences are fuelling positive sentiment,” a Beijing-based metals analyst said.

LME Week kicks off in London next week while the Cesco Asia Copper Week takes place in Shanghai at the end of November.

China is expected to tighten its scrap import policies with market participants estimating 300,000-1 million tonnes of China’s scrap copper imports could be affected by a ban.

LME copper inventories fell another 4,175 tonnes to 283,450 tonnes yesterday, with ANZ Research noting that stocks have fallen 10% over the past four weeks.

Meanwhile, the most-traded January nickel contract jumped 1,440 yuan to 96,240 yuan per tonne as of 03:44 BST, with close to 352,000 of the contracts having traded so far.

Nickel continues to be supported by concerns over tightening Chinese nickel pig iron (NPI) production and nickel metal supply, and expected demand from Tsingshan Group’s Indonesia stainless steel mill and the global growth in electric vehicle batteries, industry watchers said.

Shandong Xinhai Technology, China’s largest NPI-only producer, has been ordered to halve its production from November 15 to alleviate pollution, which could remove around 200,000-250,000 tonnes of NPI from the market over the four month period, Metal Bulletin understands.

Rest of complex higher

  • The SHFE December zinc contract price rose 395 yuan to 25,825 yuan per tonne.
  • The SHFE December aluminium contract price increased 70 yuan to 16,310 yuan per tonne.
  • The SHFE December lead contract price gained 160 yuan to 19,455 yuan per tonne.
  • The SHFE January tin contract price edged up 590 yuan to 145,340 yuan per tonne.

Currency moves and data releases

  • The dollar index was down 0.09% to 93.75 as of 03:42 BST. The index had risen as high as 94.02 on Monday, the highest since October 6.
  • In other commodities, the Brent crude oil spot price climbed 0.11% to $57.36 per barrel at 03:42 BST.
  • In equities, the benchmark Shanghai Composite Index rose 0.12% to 3,384.67.
  • In data on Monday, EU consumer confidence for October came in at -1, while within expectations, a number below zero depicts pessimism among consumers.
  • The economic agenda is light today with mainly China’s CB leading index and the USA’s flash manufacturing and flash services purchasing managers’ index of note.

SHFE snapshot at 1044 Shanghai time
Most traded SHFE contracts
  Price (yuan/t)  Change since yesterday’s close (yuan)
Copper  55,670 1,280
Aluminium 16,310 70
Zinc 25,825 395
Lead 19,455 160
Tin  145,340 590
Nickel  96,240 1,440

LME snapshot at 0344 London time
Latest 3M  LME Prices
  Price ($/t)  Change since yesterday’s close ($)
Copper 7,099 95
Aluminium 2,140 3
Lead 2503.50 3.5
Zinc 3161.50 32.5
Tin 19,745 165
Nickel 11,960 100

Changjiang spot snapshot on October 24
  Range (yuan/t)  Change (yuan)
Copper  26,420-27,220 340
Aluminium 16,120-16,160 30
Zinc 26,420-27,220 340
Lead 19,750-19,950 150
Tin  143,500-145,500 1,000
Nickel  96,250-96,550 1,450