LIVE FUTURES REPORT 09/01: SHFE base metals prices mixed amid easing US-Iran tensions

Base metals traded on the Shanghai Futures Exchange were on divergent paths at the close of morning trading on Thursday January 9, with easing tensions between Iran and the United States providing a slight boost to risk sentiment.

This follows comments from US President Donald Trump on Wednesday in which he said Iran “appears to be standing down” after the latter fired missiles at two bases in Iraq that house US troops, while also advocated further sanctions against Iran rather than a military response.

“President Donald Trump made the announcement that the US will not resort to military action… this saw a reduction in risk-off sentiment and is supportive of the copper price,” an analyst with Citic Futures said in a morning note.

The most-traded March copper contract on the SHFE closed the morning session at 48,940 yuan ($7,045) per tonne, up by 80 yuan per tonne – or 0.2% – from Wednesday’s close of 48,860 yuan per tonne.

“In the copper market, although the expectation of Copper Smelters Purchase Team (CSPT) to curb production didn’t come true, the supply worries for copper concentrates persist, and this has capped the downward pressure in [metal] prices,” the Citic Futures analyst said.

Elsewhere, March nickel rebounded by 2.3% to 111,740 yuan per tonne at the close of morning trading, while June tin rose by 1.2% to 137,230 yuan per tonne. In terms of losses, February aluminium was down by 0.6% at 14,070 yuan per tonne, March zinc dipped by 0.1% to 18,345 yuan per tonne and February lead slid 0.1% to 14,945 yuan per tonne.

Other highlights

  • In European data on Wednesday, German factory orders fell more than expected in November 2019 with a 1.3% month-on-month decline. Consensus had been for a 0.2% increase.
  • US releases on Wednesday showed private sector employment increased by 202,000 jobs in December 2019 from November, much higher than the expected 160,000-job increase.
  • Chinese data already out on Thursday showed the consumer price index (CPI) rose by 4.5% in the final month of last year, flat from November but below analysts’ predictions of a 4.7% increase.
  • Later we have German industrial production and trade balance and unemployment claims from both the European Union and US.