LIVE FUTURES REPORT 07/03: SHFE aluminium prices dip on lack of clarity regarding future capacity cuts

Aluminium prices on the Shanghai Futures Exchange weakened during Asian morning trading on Wednesday March 7, after market participants were left with little to cheer about due to the uncertainty surrounding China’s plans for further aluminium capacity cuts this year.

The most-traded May aluminium contract on the SHFE decreased to 14,400 yuan ($2,275) per tonne as of 10.00am Shanghai time, down by 40 yuan or 0.3% from the previous day’s close of 14,440 yuan per tonne.

Ning Jizhe, deputy director of China’s National Development and Reform Commission, announced on Tuesday that China will continue to curtail domestic aluminium capacity this year to further advance its supply-side structural reform.

In response to the news, the SHFE’s May aluminium contract climbed to a high of 14,515 yuan per tonne during trade on Tuesday, before a lack of details regarding the proposed cuts caused the price to retreat.

“[Ning] did not give any details about the actual amount of aluminium capacity that is scheduled to be cut – as we have seen for the steel and coal markets – so the news did little to support the aluminium market,” a Shanghai-based trader said.

Copper, tin prices dip; rest higher

  • The SHFE May copper contract price decreased 160 yuan or 0.3% to 52,460 yuan per tonne.
  • The SHFE May tin contract price decreased 220 yuan or 0.2% to 146,370 yuan per tonne.
  • The SHFE May zinc contract increased by 50 yuan or 0.2% to 25,445 yuan per tonne.
  • The SHFE April lead contract price increased by 95 yuan or 0.5% to 18,735 yuan per tonne.
  • The SHFE July nickel contract edged 20 yuan higher to 102,850 yuan per tonne.

Currency moves and data releases

  • The dollar index was little changed at 89.52 as of 11.12am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down 0.25% to $65.25 per barrel as of 11.13am Shanghai time.
  • In equities, the Shanghai Composite was up by 0.17% to 3,295.07 as of 11.15am Shanghai time.
  • In data on Tuesday, US retail sales in February came in at 52.3, above the previous month’s reading of 50.8.
  • On the economic agenda today, UK house prices, EU revised gross domestic product and a host of US data including ADP non-farm employment change, revised non-farm productivity, revised unit labor costs, trade balance, crude oil inventories and the US Federal Reserve’s beige book are due.
  • In addition, US Federal Open Market Committee members Raphael Bostic and William Dudley are speaking.

LME snapshot at 02.00am London time
Latest three-month LME Prices
Price ($ per tonne)  Change since yesterday’s close ($)
Copper 6,962.5 -41.5
Aluminium 2,144 -3
Lead 2,426 -12
Zinc 3,310 8
Tin 21,445 15
Nickel 13,520 -160

SHFE snapshot at 10.00am Shanghai time
Most-traded SHFE contracts
Price (yuan per tonne)  Change since yesterday’s close (yuan)
Copper (May) 52,460 -160
Aluminium(May) 14,400 -40
Zinc(May) 25,445 50
Lead(April) 18,735 95
Tin (May) 146,370 -220
Nickel (July) 102,850 20

Changjiang spot snapshot on March 7
Range (yuan/t)  Change (yuan)
Copper  51,950-51,970 100
Aluminium 14,050-14,090 0
Zinc 25,520-26,320 140
Lead 18,700-18,900 150
Tin  145,000-146,500 -250
Nickel  102,100-102,400 350
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