SHFE base metals rise ahead of New Year holiday

Base prices on the Shanghai Futures Exchange (SHFE) rose during Asian morning trading on Wednesday February 14, the last trading day before the Lunar New Year break.

The May nickel contract on the SHFE stood at 102,860 yuan ($16,191) per tonne as of 10.00 am Shanghai time, up by 1,990 yuan, or 2%, from the previous session’s close of 100,870 yuan per tonne.

Demand from the stainless steel sector remains strong, with world stainless steel melting production increasing 7.4% year on year in January-September 2017, the latest figures from the International Stainless Steel Forum (ISSF) show.

“Demand from Chinese steel mills, however, is expected to slow over the short-to-medium term because cost constraints will be exacerbated by environmental-related and Lunar New Year capacity closures, but this should be offset by strong demand elsewhere,” according to Metal Bulletin analyst James Moore.

The most-traded SHFE April copper contract price stood at 52,630 yuan per tonne, up 490 yuan, or 0.8%, from the previous session’s close of 52,140 yuan per tonne, after a rally in LME prices.

The three-month LME copper price continues to recoup its losses, closing yesterday $156 per tonne higher at $6,987 per tonne. The red metal has risen 3.4% so far this week.

Base metals all up

  • The SHFE March lead contract price increased by 265 yuan, or 1.4%, to 19,280 yuan per tonne.
  • The lead market remains bullish – the global lead market was in a 169,000-tonne deficit in January-November 2017, according to the latest data from the International Lead & Zinc Study Group (ILZSG).
  • The SHFE May tin contract price rose by 1,970 yuan, or 1.3%, to 148,770 yuan per tonne.
  • The SHFE April zinc contract price was up 1.2% at 26,535 yuan per tonne.
  • The SHFE April aluminium contract price increased 15 yuan, or 0.1%, to 14,395 yuan per tonne.

Currency moves and data releases

  • The dollar index decreased by 0.14% to 89.59 as of 10.37 am Shanghai time.
  • In other commodities, the Brent crude oil spot price was up by 0.24% at $62.79 per barrel.
  • In equities, the Shanghai Composite was down by 0.12% at 3,181.13.
  • In data yesterday, the UK Consumer Price Index (CPI) increased 3% year on year, higher than the forecast 2.9%, while the Producer Price Index (PPI) rose 0.7%, in line with expectations.
  • In data today, EU flash GDP and industrial production numbers are due out, while in the United States CPI, retail sales and crude oil inventories figures will be released.