LIVE FUTURES REPORT 07/08: Nickel price fails to hold above $15,000; Al shrugs off 21kt cancellation

Three-month base metals prices on the London Metal Exchange were mostly down during morning trading on Wednesday August 7, with nickel down by 1.2%.

The three-month nickel price was most recently trading at $14,765 per tonne, down by $180 per tonne from Tuesday’s closing price of $14,945 per tonne.

“[On Tuesday] nickel peaked at just over $15,000 per tonne on continued fears over Indonesian exports bans,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note.

“So far this morning prices have started to drift back down on thin volumes, the Asian equities are weaker and the Dow Futures are currently down 112 points,” he added.

Nickel prices were buoyed over $15,000 per tonne earlier this week after growing speculation that the Indonesian government may bring forward a proposed ban on exports of unprocessed nickel ore fueled fears that supply of the material may tighten.

The three-month nickel price has already spanned a trading range of $335 per tonne as of 9.30am London time, a wider trading range than on Tuesday.

Zinc prices also continued to decline due to poor demand. The three-month zinc price fell back below the $2,300-per-tonne support barrier this morning and was most recently trading at $2,282.50 per tonne, down by $27.50 per tonne from Tuesday’s close of $2,310 per tonne.

“The LME three-month zinc price fell to a fresh low of $2,283 per tonne this morning, in line with the 2018 low registered in mid-August,” Alastair Munro from UK-based brokerage Marex Spectron’s LME Desk said in a note.

Aluminium shrugs off new cancellations
Aluminium prices were little changed this morning, edging just $3 per tonne higher to $1,761 per tonne from Tuesday’s close.

This was despite another series of cancellations from LME warehouses. A total of 21,000 tonnes were freshly cancelled on Wednesday, with 20,000 tonnes being canceled in Port Klang, Malaysia.

This follows a 17,000-tonne cancellation at LME warehouses earlier this month. LME on-warrant stocks now sit at just 736,000 tonnes but the three-month aluminium price has failed to gain any upward momentum above $2,000 per tonne since November 2018.

Other highlights

  • The dollar index was little changed, up by 0.06% at 97.65.
  • In data on Wednesday, the Reserve Bank of New Zealand delivered a surprise 50-basis-point cut to its official cash rate, now at 1.00%. While a cut was widely expected, the actual cut was larger than had been forecast.
  • Later, German industrial production and a speech from US Federal Open Market Committee member Charles Evans are of note.