LIVE FUTURES REPORT 04/12: SHFE base metals mostly higher; copper prices propped up by short-covering

Base metal prices on the Shanghai Futures Exchange were mostly higher during Asian morning trading on Monday December 4, with copper rising amid short-covering.

The most-traded January copper contract on the SHFE stood at 53,450 yuan ($8,076) per tonne as of 11.30am Shanghai time, up by 550 yuan from last Friday’s close, with around 180,000 lots changing hands so far.

Open interest of the contract was at 148,152 positions as of 10:15 am Shanghai time, down from 153,326 positions at last Friday’s close.

The rebound in SHFE copper prices is weak, with limited upside strength in the near term, China’s Ruida Futures said late last Friday. The broker recommended clients sell at 52,400-53,200 yuan per tonne and buy at low levels.

Base metals prices have been broadly supported by recent Chinese purchasing managers’ index (PMI) readings, which although were below expectations for the Caixin number, showed that China’s economy remained in expansion mode, some market watchers noted.

China’s November Caixin PMI was at 50.8 versus an expected reading of 51.2. A reading above 50 indicates expansion, while below signals contraction.

On November 30, China’s official November PMI came in at 51.8, beating both the forecast of 51.4 and the previous figure of 51.6.

“While the official gauge showed another month in expansionary territory, the private sector version by Caixin dipped slightly. Even so, it remained above 50 and was enough to remove any doubt in investors’ minds about the outlook in the short term,” ANZ Research said on Monday.

Meanwhile, strike concerns remain at Southern Peru Copper Corp and Teck’s Quebrada Blanca copper mine.

Copper stocks in Shanghai bonded warehouses fell 20,000 tonnes or 4.1% month on month to 460,000-470,000 tonnes in late November, according to Metal Bulletin’s assessment.

Deliverable copper stocks at SHFE-approved warehouses, however, increased by 4,174 tonnes or 2.5% last week to 168,987 tonnes as of December 1.

Other metals higher, bar aluminium

  • The SHFE January aluminium contract price dipped by 75 yuan to 14,525 yuan per tonne amid concerns that Chinese winter output cuts may not be as severe as expected.
  • “It is difficult for aluminium price to move higher as smelters lack drive to cut production due to high smelting profits,” China’s Minmetals Jingyi Futures said last Friday.
  • SHFE aluminium stocks continued to climb. It rose 7,749 tonnes over the past week to 702,321 tonnes as of December 1.
  • The SHFE May nickel contract price surged by 1,700 yuan to 91,850 yuan per tonne amid dip buying.
  • The SHFE January lead contract price rose by 315 yuan to 19,065 yuan per tonne
  • The SHFE January zinc contract price gained 480 yuan to 25,665 yuan per tonne.
  • The SHFE January tin contract price increased by 890 yuan to 141,560 yuan per tonne.

Currency moves and data releases

  • The dollar index rose by 0.26% to 93.11 as of 11.50am Shanghai time.
  • In other commodities, the Brent crude oil spot price fell by 0.42% to $63.34 per barrel as of 03.50am London time.
  • In equities, the Shanghai Composite was up by 0.12% to 3,321.65.
  • On Sunday, the US Senate passed its tax reform bill. “In the next step, a House-Senate conference committee will work to resolve the differences between the House and Senate tax bills. With both bills calling for a reduction in the corporate tax rate to 20%, US tax reform progress is expected to help sustain growth in corporate capital investments and [merger and acquisition] activities,” Credit Suisse said.
  • In US data from last Friday, final manufacturing PMI for November came in marginally higher at 53.9 from an expected rollover of 53.8. The ISM manufacturing PMI for November was at 58.2, slightly below forecast of 58.4. October construction spending rose 1.4%, higher than expectations of a 0.5% increase. November ISM manufacturing prices disappointed at 65.5 – a reading of 67 was called for.
  • Data due later today includes US factory orders, UK construction PMI, and European Sentix investor confidence and producer price index.

SHFE snapshot at 11.30am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since yesterday’s close (yuan)
Copper (January) 53,450 550
Aluminium (January) 14,525 -75
Zinc (January) 25,665 480
Lead (January) 19,065 315
Tin  (January) 141,560 890
Nickel  (May) 91,850 1,700

LME snapshot at 03.32am London time
Latest three-month LME Prices
  Price
($ per tonne)
Change since yesterday’s close ($)
Copper 6,844 11
Aluminium 2,069.50 -5
Lead 2,541 -4
Zinc 3,232.50 -16.5
Tin 19,495 40
Nickel 11,350 60

Changjiang spot snapshot on December 4
  Range
(yuan per tonne)
Change (yuan)
Copper  53,350-53,370 590
Aluminium 14,190-14,230 -80
Zinc 25,760-25,810 500
Lead 18,950-19,150 550
Tin  141,000-142,000 250
Nickel  91,200-91,400 1,150
What to read next
The global copper market has finally received the widely anticipated news that imports to the US will be tariffed from August 1. The finer details of the tariffs, including their scope, and whether key copper-exporting nations like Chile, Canada and Peru will be exempt, remain unclear.
LME copper prices took a significant hit following US President Donald Trump's announcement of a potential 50% tariff on copper imports. The uncertainty surrounding the timeline and implementation of the tariff has left market participants hesitant, with analysts noting its immediate impact on price momentum and trading activity.
Fastmarkets has launched MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonne on July 9 due to an expected increase in Indonesia-origin aluminium exports. MB-AL-0424 Aluminium P1020A premium, fob Indonesia, $/tonneQuality: P1020A or 99.7 % Minimum Al purity (Si 0.10% max, Fe 0.20% max) in line with LME specifications. Ingot, T-bar, sowQuantity: Min 500 tonnesLocation: FOB IndonesiaTiming: […]
To increase the transparency of our methodology, Fastmarkets clarifies that the quotation period of the MHP nickel payable indicator is the month of delivery, or the month M. Any data points Fastmarkets received otherwise will be normalized to the M month based on the monthly spreads of the prevailing exchange-traded Class-1 nickel reference price, or […]
'Probably miscalculated’ assumptions at Kakula mine force Ivanhoe to overhaul entire Kamoa-Kakula complex, explains CEO Marna Cloete.
Following an initial consultation with the market, Fastmarkets is proposing to:  The new specifications would be as follows, with amendments in italics: MB-CU-0002 Copper grade 1 cathode premium, ddp Midwest US, US cents/lb Quality: Grade A 99.9935% min copper cathode conforming to LME specifications BS EN 1978:2022 – Cu-CATH-1 or Grade 1 Electrolytic Copper Cathode ATSM B1115-10 Quantity: Min […]