LIVE FUTURES REPORT 02/01: Copper down on lower-than-expected Chinese PMI number

The most-traded February copper contract on the SHFE was down 500 yuan ($77) per tonne to 54,970 yuan per tonne as of 10:51am Shanghai time.

Meanwhile, the three-month LME copper contract was down $35 per tonne to $7,216.5 per tonne.

China’s official December manufacturing PMI fell from 51.8 in November to 51.6 in December, lower than the market expectation of 51.7 but still in expansionary territory.

“We expect economic activities to soften in the fourth quarter of 2017 and first quarter of 2018 but remain resilient — we attribute the manufacturing PMI decline to the crackdown on polluting activities during the heating season and the slowdown of property investment and related activities,” said Citi Bank in a latest report.

“These factors may continue to weigh on the economy until the early part of 2018. In particular, the Central Economic Work Conference gave a high priority to environmental protection, which will curb industrial production directly,” said Citi Bank.

“Looking ahead, we believe a moderate growth slowdown to be more visible in first half of 2018, especially on the investment front, due mainly to the tight financial conditions and a cooldown of the property market. We expect the PBoC to maintain a tightening bias in its monetary policy, as the top policy makers promotes high-quality growth and shift focus to reforms in 2018,” said BofA Merrill Lynch in a report on January 2.

However, the Caixin PMI released on Tuesday morning showed a different trend in the country’s economy.

The December Caixin PMI logged in at 51.5, a four-month high and beating market expectations of 50.8 It was also higher compared with 50.7 in November.

Other metals mixed

• The most-traded February aluminum contract was down 160 yuan to 15,065 yuan per tonne.
• The SHFE February zinc contract was up 35 yuan per tonne to 25,760 yuan per tonne.
• The SHFE February lead contract was down 200 yuan to 18,970 yuan per tonne.
• The SHFE January nickel contract was up 1,000 yuan per tonne to 97,400 yuan per tonne.
• The SHFE January tin contract was up 440 yuan per tonne to 143,240 yuan per tonne.

Currency moves and data releases

• In other commodities, the Brent crude oil spot price was up $0.48 at to $67.97 per barrel and the Texas light sweet crude oil spot price was down $0.50 at $60.59 per barrel.
• In equities, the Shanghai Composite index was up 1.08% to 3,342.98.
• US dollar index on Tuesday morning was down 0.08 to 92.22.
• In data, major economies including Spain, Italy, French, Britain, United States and Canada are all expected to release manufacturing PMI numbers today.