LIVE FUTURES REPORT 08/06: SHFE nickel prices lead others downward

Base metals prices on the Shanghai Futures Exchange were down across the board during Asian morning trading on Friday June 8, with nickel prices, under pressure from the weakening buyer sentiment seen in the stainless steel sector and bouts of profit-taking, leading the decline.

The most-traded September nickel contract price on the SHFE fell to 115,940 yuan ($18,135) per tonne as at 09.58am Shanghai time, down by 2,070 yuan per tonne from Thursday’s closing price.

“Prices for stainless steel remain at a high level which has led to [some resistance] from downstream buyers. Nickel prices are also under pressure in such circumstances,” Citic Futures Research said.

But given that supply remains tight, coupled with continual declines in inventory levels, the outlook for nickel remains bullish overall, according to market observers.

Yet given the substantial rise in nickel prices over the past few weeks, prices have become increasingly vulnerable to profit-taking, compounded by the fact that more conservative traders are inclined to lock in some profits by the end of the trading week.

The most-traded nickel contract price on the SHFE has shown an increase of 8,130 yuan per tonne (or 7.5%) from 107,810 yuan per tonne at the close on May 24.

Meanwhile, copper prices also succumbed to profit-taking this morning after logging continual gains earlier in the week.

The most-traded August copper contract price fell by 220 yuan per tonne to 53,940 yuan per tonne as at 09.58am Shanghai time, but remains 2,460 yuan per tonne (or 4.8%) higher than June 1’s closing price of 51,480 yuan per tonne.

Analysts see stable strength in the Chinese copper market in the short term due to the country’s latest round of environmental inspections and the ongoing labor negotiations at the world’s largest copper mine, Escondida.

Environmental inspection teams have been dispatched to 10 provinces in China to review the progress made in curbing pollution since the end of May, with primary copper smelting capacities in important regional hubs such as Jiangxi province having been partly suspended.

Base metals prices

  • The SHFE August aluminium contract price fell 190 yuan per tonne to 14,895 yuan per tonne.
  • The SHFE July zinc contract price slipped 95 yuan per tonne to 24,365 yuan per tonne.
  • The SHFE September tin contract price dropped 1,180 yuan per tonne to 152,280 yuan per tonne.
  • The SHFE July lead contract price declined 260 yuan per tonne to 20,385 yuan per tonne.

Currency moves and data releases

  • The dollar index was up by 0.02% at 93.47 as at 11.03am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down by 0.22% to $77.31 per barrel as at 11.03am Shanghai time.
  • In equities, the Shanghai Composite was down by 1.02% to 3,077.74 as at 11.04am Shanghai time.
  • In US data on Thursday, weekly unemployment claims came in at 222,000, just below an expected print of 223,000.
  • The economic agenda is fairly light today with the tentative release of China’s trade balance as well as European data that includes German and French industrial production and the United Kingdom’s consumer inflation expectations. Final wholesale inventories from the United States are also due.
  • In addition, day one of the G7 Summit in Quebec, Canada, kicks off today. Attendees of the event are expected to discuss a range of global economic issues such as trade relations and tariffs.
  • Looking ahead to Saturday, investors will be keeping a close eye on the release of China’s consumer and producer price indices.

LME snapshot at 2.53am London time
Latest three-month LME Prices
($ per tonne)
 Change since Thursday’s close ($)
Copper 7,243 -4
Aluminium 2,292 7
Lead 2,487 -9
Zinc 3,153 -10
Tin 21,210 -10
Nickel 15,460 40

SHFE snapshot at 9.58am Shanghai time
Most-traded SHFE contracts
(yuan per tonne)
 Change since Thursday’s close
Copper  53,940 -220
Aluminium 14,895 -190
Zinc 24,365 -95
Lead 20,385 -260
Tin  152,280 -1,180
Nickel  115,940 -2,070

Changjiang spot snapshot on June 8
(yuan per tonne)
 Change (yuan)
Copper  53,700—53,720 1,110
Aluminium 14,790—14,830 180
Zinc 24,880—25,880 -200
Lead 20,700—20,900 0
Tin  150,000—151,500 0
Nickel  118,150—118,250 -400
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