LIVE FUTURES REPORT 06/03: SHFE base metals prices largely down; Pb bucks trend

With the exception of that for lead, base metals prices on the Shanghai Futures Exchange were down during the morning trading session on Friday March 6 amid a persistent risk-off mood among investors.

Risk appetite remains suppressed by news that the novel coronavirus (2019-nCOV) continues to spread around the world, with nearly 100,000 people infected globally. This renewed pessimism overshadowed broad-based government action to lower interest rates and make money available to markets, which had underpinned the base metals in recent days.

“Some countries have cut interest rates in response to the virus’ spread but the market is becoming more worried over the increasing number of headlines about the virus spreading outside of China, and this is weighing on the market,” a base metals analyst in Shanghai said.

Copper was the worst performer of the SHFE base metals in terms of percentage losses during the morning trading; the red metal’s most-traded May contract slid to 45,070 yuan ($6,495) per tonne at the close of the morning session, down by 390 yuan per tonne or 0.86% from 45,460 yuan per tonne.

“Copper, as a leading indicator of economic trends, is very sensitive to declines amid risk-off sentiment, especially when it remains unclear when a notable demand recovery will materialize in virus-delayed markets,” the analyst added.

Losses were also observed in May aluminium at 13,170 yuan per tonne (-0.57%), April zinc at 15,975 yuan per tonne (-0.50%), June tin at 136,160 yuan per tonne (-0.44%) and June nickel at 103,320 yuan per tonne (-0.08%).

Lead was the sole metal that ended the morning session higher, with its April contract up by 35 yuan or 0.24% at 14,465 yuan per tonne.

Other highlights

  • The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, edged lower by 0.08% at 96.58 as at 11.31am Shanghai time.
  • The Shanghai Composite Index was down by 0.99% at 3,041.26 as at 11.30 am Shanghai time.
  • In a relatively light data calendar on Friday, the United States will publish its monthly jobs report and trade balance.
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