LIVE FUTURES REPORT 05/03: SHFE base metals start week on back foot; nickel, tin prices up marginally

Base metals traded on the Shanghai Futures Exchange were broadly weaker during Asian morning trading on Monday March 5, with only nickel and tin prices managing to post slight gains.

The most-traded May nickel contract on the SHFE rose to 102,250 yuan ($16,115) per tonne as of 10.02am Shanghai time, up by 70 yuan or 0.1% from Friday’s close of 102,180 yuan per tonne.

“We previously argued that the nickel price came from a very low base and offered long-term investors good value. This has perhaps encouraged speculative funds to maintain their bullish exposure and maintain the upward trend for now. Moreover, money managers are sticky with their bullish exposure and that could bode well for the metal,” according to Metal Bulletin analyst Andy Farida.

Meanwhile, copper and zinc prices have come under pressure from the significant increases in stock levels seen at SHFE warehouses last week.

Deliverable SHFE copper stocks increased by 41,755 tonnes to 260,287 tonnes as of last Friday, up by 19.1% from the 218,532 tonnes recorded on February 23, when the market reopened after the Lunar New Year holidays.

Zinc stocks at SHFE-listed warehouses climbed 31% or 35,664 tonnes last week to 150,551 tonnes as of Friday.

“End-users have not all come back [from the Lunar New Year holiday] yet, so demand was still a little weak [last week], but the market still has high expectations for the second quarter,” a Shanghai-based trader said.

Base metals prices

  • The SHFE April copper contract price decreased 180 yuan or 0.3% to 52,140 yuan per tonne.
  • The SHFE April zinc contract price declined 290 yuan or 1.1% to 25,970 yuan per tonne.
  • The SHFE May aluminium contract fell 95 yuan or 0.7% to 14,330 yuan per tonne.
  • The SHFE April lead contract price dropped 65 yuan or 0.3% to 18,830 yuan per tonne.
  • The SHFE May tin contract price rose 230 yuan or 0.2% to 147,610 yuan per tonne.

Currency moves and data releases

  • The dollar index was down 0.04% at 89.96 as of 10.57am Shanghai time.
  • In other commodities, the Brent crude oil spot price was up 0.49% to $64.64 per barrel as of 10.58am Shanghai time.
  • In equities, the Shanghai Composite was down by 0.47% to 3239.38 as of 11.01am Shanghai time.
  • In data on Friday, the United States’ revised University of Michigan (UoM) consumer sentiment was better than expected at 99.7, beating a forecast print of 99.4. Meanwhile, the revised UoM inflation expectations at 2.7%, was flat with the previous reading.
  • In data today, the Chinese government announced a gross domestic product (GDP) growth target of around 6.5% for 2018, while aiming for consumer inflation, measured by the consumer price index, of approximately 3%.
  • China’s Caixin services purchasing managers’ index (PMI) was slightly weaker than expected, coming in at 54.2 against a forecast print of 54.3, while this was also lower than the previous reading of 54.7.
  • Later, we have services PMI data out across Europe and the US. The ISM non-manufacturing PMI from the US is also due.
  • In addition, US Federal Open Market Committee member Randal Quarles is speaking.
LME snapshot at 02.02am London time
Latest three-month LME Prices
Price ($ per tonne) Change since Friday’s close ($)
Copper 6,930 32
Aluminium 2,143.5 -5.5
Lead 2,461 13
Zinc 3,381 26
Tin 21,590 115
Nickel 13,440 -10

SHFE snapshot at 10.02am Shanghai time
Most-traded SHFE contracts
Price (yuan per tonne) Change since Friday’s close (yuan)
Copper (April) 52,140 -180
Aluminium(May) 14,330 -95
Zinc(April) 25,970 -290
Lead(April) 18,830 -65
Tin (May) 147,610 230
Nickel (May) 102,250 70

Changjiang spot snapshot on Monday March 5
Range (yuan per tonne) Change (yuan)
Copper 51,760-51,780 -190
Aluminium 13,930-13,970 -170
Zinc 25,930-26,730 -160
Lead 18,800-19,000 -100
Tin 145,500-147,500 0
Nickel 101,650-101,950 0
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