LIVE FUTURES 29/10: LME nickel price down 1.5%; most base metals on course for monthly increase

Base metals prices on the London Metal Exchange were broadly down on the morning of Friday October 29 following a brief rally on Thursday, however all but aluminium look set for a positive monthly close.

Aluminum’s three-month price was at $2,720 per tonne at 9am on Friday, down by 1% from $2,746.50 per tonne at Thursday’s 5pm close.

The light metal is the only LME base metal on course for a negative monthly close, having closed at $2,857 per tonne on October 1. It did reach a new year-to-date high of $3,229 per tonne on October 18 but has retreated since then.

“Upon closer inspection, LME aluminium has wiped out both the September and October gains in a short space of just two weeks,” Fastmarkets analyst Andy Farida said.

Aluminium has been under pressure due to developments in the Chinese coal industry, with prices for the combustible material dropping once again on Friday.

“Thermal coal prices fell as much as 8.7% after the NDRC (National Development and Reform Commission) said production costs for coal miners are much lower than current spot prices and had room to fall further,” Anna Stablum, LME desk analyst at Marex, said.

Elsewhere, nickel’s three-month price fell the most of the LME base metals on Friday morning, dropping by 1.5% to $19,275 per tonne. Nickel’s intraday low was of $19,205 per tonne, the lowest for the electric battery component since October 14.

But nickel is set for a 7.3% rise since the start of the month, having had a closing price of $17,971 per tonne on October 1.

Looking at LME Stocks, the amount of nickel on-warrant in global LME warehouses fell by 25.6% to 77,862 tonnes as of Friday, from 104,622 on October 1.

Another metal set for a positive month-end close is zinc, with its three-month price of $3,338 per tonne at 9am on Friday, increasing by 11.9% from its October 1 closing price of $2,982.50 per tonne.

Zinc’s outright price had a strong month on account of producers pointing to lower production in Europe due to high energy prices. The galvanizing metal hit a 14-year high of $3,944 per tonne on October 15.

“All in all, October has been a month that many would like to not have to live through again in trading terms, with excessive intraday movements that seem to bear little reality to what is happening in the physical markets,” Kingdom Futures director Malcolm Freeman said on Friday morning.

“For the moment prices look to be a case of disillusioned longs getting out of the market, but today is month-end, and the question is: will the big boys try to rally the prices once more for valuation purposes,” he added.

Other highlights

  • Copper’s cash/three-month spread tightened to a last implied amount of $320 per tonne backwardation, from $187 per tonne at the close on Thursday.
  • Tin’s three-month price was the only metal on Friday morning to rise, increasing to $36,630 per tonne from $35,858 per tonne on Thursday.
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