LIVE FUTURES REPORT 03/01: SHFE base metals prices mostly down; Ni retreats 1.8%

With the exception of tin and zinc that were little changed, base metals prices on the Shanghai Futures Exchange were down at the close of the morning trading session on Friday January 3.

Nickel was the worst performer of the complex, with its most-traded March contract sliding to 109,310 yuan ($15,688) per tonne, down by 2,000 yuan per tonne – or 1.8% – from Thursday’s close of 111,310 yuan per tonne.

This follows similar weakness on Thursday, when the alloying metal shed 1.5% to end the morning trading session at 110,410 yuan per tonne.

“It’s profit-taking after previous gains,” a Shanghai-based nickel analyst told Fastmarkets, adding that no significant restocking ahead of the Lunar New Year holidays (January 24-30) has been heard so far.

“Nickel has had an extraordinary bullish 2019, supported mostly by the Indonesian government’s decision to expedite a ban on nickel ore exports much earlier than expected,” Fastmarkets analyst Andy Farida said.

“Although much of the excessive bullish vibe has been removed in the last trading quarter of the year, the metal still holds a great deal of positive catalysts going into 2020,” Farida added.

Elsewhere, tin was the lone metal in positive territory at the close of morning trading but its most-traded June contract was up by just 20 yuan per tonne at 135,220 yuan per tonne. February zinc dipped by 5 yuan per tonne to 17,875 yuan per tonne, February lead dropped by 0.5% to 14,835 yuan per tonne, February copper slid 0.5% to 49,010 yuan per tonne and February aluminium fell by 0.6% to 14,000 yuan per tonne.

Other highlights

  • The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was at 96.76 as at 11.54am Shanghai time, against a reading of 96.52 at a similar time on Thursday.
  • In European data on Thursday, the United Kingdom’s final manufacturing purchasing managers’ index (PMI) for the December 2019 period was recorded at 47.5, improving from the prior reading of 47.4.
  • Similarly, the European Union’s final manufacturing PMI over the same period was better at 46.3, improving from 45.9 at the previous reading.
  • United States data out on Thursday showed unemployment claims over the December period were in line with expectations at 222,000, down from 224,000 at the prior reading.
  • The economic agenda is busy on Friday with key releases that include the US’ Institute for Supply Management (ISM) manufacturing PMI, construction spending, Wards total vehicle sales and crude oil inventories.
  • In addition, US Federal Open Market Committee (FOMC) members Robert Kaplan and Lael Brainard are speaking, while the minutes from the most recent FOMC meeting are also due.