LIVE FUTURES REPORT 08/11: SHFE nickel prices slide on profit-taking; copper, zinc dragged lower by demand concerns

The most-traded January nickel contract on the SHFE stood at 101,460 yuan ($15,290) per tonne as of 10:30am Shanghai time, down by 1.4% or 1,470 yuan from the previous session’s close.

After an impressive rise on bullish sentiment surrounding nickel’s prospects in the electric vehicle sector, prices have come under increasing pressure as investors looked to secure profits.

“After rising nearly 20% over the past month, investors locked in gains in the nickel market,” ANZ Research said on Wednesday.

“This was sparked by data showing that higher prices have enticed more nickel ore exports from Indonesia. Indonesia’s Energy and Mineral Resources Ministry said export quotas of nickel ore have surged to 20.4 million tonnes,” it added.

Copper, zinc fall on demand concerns

• The SHFE January copper contract declined 1.4% or 760 yuan to 53,840 yuan per tonne.
• A higher volume of copper cathode has entered China in the past few weeks, while demand is slowing as end-users have completed their restocking activities after the country’s National Day holiday at the beginning of October.
• “We are likely to see physical cathode in [the Chinese] domestic market traded at a discount this week,” a Shanghai-based trader said.
• Market participants will focus on preliminary trade data on China’s copper imports later today.
• The SHFE January zinc contract slipped 200 yuan or 0.8% to 25,505 yuan per tonne.
• “Zinc is being dragged down by rising stocks and weak end-user demand. Galvanized zinc producers in northern China still are facing pressure from environmental [clampdowns],” China’s Galaxy Futures noted.

Lead inches higher; rest lower

• The SHFE December lead contract rose 25 yuan to 18,860 yuan per tonne.
• The SHFE January aluminum contract lost 140 yuan to 15,895 yuan per tonne.
• The SHFE January tin contract down 380 yuan to 142,340 yuan per tonne.

Currency moves and data releases

• The dollar index was up by 0.06% at 94.85 as of 12:06pm Shanghai time – the index had reached a high of 95.15 on Tuesday, a level it last reached on October 27.
• In other commodities, the Brent crude oil spot price rose $0.11 to $63.65 per barrel and the Texas light sweet crude oil spot price increased $0.07 to $57.06 per barrel.
• In equities, the Shanghai Composite index was up 0.45% to 3428.93.
• In US data on Tuesday, the IBD/TIPP economic optimism reading for November came in at 53.6, its highest since March 2017. Job openings for September were above expectations at 6.09 million, compared with an expected print of 5.98 million.
• In data today, China’s dollar-denominated terms trade surplus was narrower than expected at $38.2 billion, against an expected surplus of $39.4 billion.
• Meanwhile, US crude oil inventories are due later.