LIVE FUTURES REPORT 08/08: SHFE nickel price rallies 7.2%, others broadly up

Base metals prices on the Shanghai Futures Exchange were broadly up during morning trading on Thursday August 8, with nickel outperforming its peers with a jump of 7.2% from the previous day’s close.

Nickel’s most-traded October contract price climbed to 124,890 yuan ($17,707) per tonne as at 10.25am Shanghai time, up by 8,390 yuan from its close of 116,500 yuan per tonne on Wednesday.

Nickel continues to benefit from speculation that Indonesia will tighten its policy on ore exports, while stronger demand for the alloying metal after Chinese stainless steel mills brought forward their usual procurement period from September to August on fears of tightening supply is also supporting prices, according to analysts with China-based brokerage Guotai Junan Futures.

“Previously, the regular procurement period for stainless steel plants [in China] was September. But this year, mills are starting to restock in August, which could be a sign that they are concerned of possible supply tightness developing [as a result of the uncertainty surrounding Indonesian supply],” the analysts said in a morning note.

“Supply-side uncertainties have intensified recently following reports that Indonesia will ban the export of unprocessed nickel ore in 2022. Available half-year results reflect the lower production in the nickel market; Vale and Glencore reported that output fell by 20% and 8% year on year respectively.” Fastmarkets analyst James Moore noted.

Tin also gave a strong performance during the morning trading session on Thursday, supported by Indonesian export data that showed the country’s tin shipments totaled 4,397.4 tonnes in July, decreasing by 33% from 6,575.8 tonnes a year earlier.

The soldering metal’s most-traded September contract climbed to 136,740 yuan per tonne as at 10.25am Shanghai time, up by 2,280 yuan per tonne, or 1.2%, compared with Wednesday’s close of 134,440 yuan per tonne.

Other highlights

  • Zinc was the lone metal in negative territory this morning, with the metal’s most-traded October contract declining to 18,705 yuan per tonne, down by 60 yuan per tonne, or 0.3%, from Wednesday’s close.
  • The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.05% at 97.55 as at 10.25 am Shanghai time.
  • The Shanghai Composite Index was up by 0.91% at 2,793.92 as at 11.32am Shanghai time.
  • In data on Thursday, China’s dollar-denominated trade surplus narrowed to $45.1 billion from $51 billion previously, but beating the expected surplus of $43.2 billion.
  • Later, the European Central Bank’s economic bulletin is of note.