LIVE FUTURES REPORT 09/01: SHFE base metals prices mostly higher; tin sinks

Base metals prices on the Shanghai Futures Exchange were mostly higher during Asian morning trading on Tuesday January 9, with copper prices finding slight support from potential supply-side constraints, while tin was the lone metal in negative territory.

The most-traded March copper contract on the SHFE stood at 54,730 yuan ($8,422) per tonne as of 10.55am Shanghai time, up by 40 yuan from the previous session’s close.

Concerns over constrained supply stemming from tightening regulations in China over imported scrap and looming labor negotiations at mines have provided some support for light metal prices this morning.

The Chinese government has finished issuing the first two rounds of solid waste import licenses for 2018, with copper scrap import license numbers and tonnages both more than 94% lower.

China’s Ministry of Environmental Protection issued new regulations in mid-December 2017 that only end-users in the business of processing solid waste will be allowed to apply for import licenses for scrap listed as “restricted imports”.

The new regulations are expected to prevent a number of Chinese market participants from acquiring imported copper scrap due to the limited number of licenses granted, with some noting that the uncertainty surrounding how strictly regulators will carry out these new rules has left them adopting a wait-and-see approach rather than applying for an import license.

Meanwhile, labor negotiations at several of the world’s leading copper mines are expected to increase supply risk this year and could provide support to prices, according to market analysts.

More than 30 labor contracts are due to be renegotiated next year – the largest number since 2010.

Yet a firmer dollar and lack of significant data releases has left the market on the lookout for further direction, stifling any substantial gains in the base metals complex.

The dollar index was at 92.23 as of 10.15am Shanghai time, compared with a reading of 92.05 at roughly the same time on Monday.

Base metals flat to firmer; tin declines

  • The most-traded February aluminum contract on the SHFE was unchanged at 14,935 yuan per tonne.
  • The SHFE March zinc contract was up by 245 yuan to 26,305 yuan per tonne.
  • The SHFE February lead contract rose by 175 yuan to 19,580 yuan per tonne.
  • The SHFE May nickel contract rose by 820 yuan to 99,310 yuan per tonne.
  • The SHFE May tin contract decreased by 370 yuan to 144,240 yuan per tonne.

Currency moves and data releases

  • The dollar index dipped by 0.1% to 92.23 as of 10.15am Shanghai time.
  • The dollar is in recovery mode, supported by expectations of a March interest rate increase by the US Federal Reserve.
  • In equities, the Shanghai Composite Index was up by 0.08% to 3412.24 as of 11.30 am Shanghai time.
  • In other commodities, the Brent crude oil spot price edged $0.31 higher to $68.17 per barrel as of 11.50am Shanghai time and the Texas light sweet crude oil spot price declined by $0.01 to $62.19 per barrel.
  • The economic agenda is light today with the European Union’s unemployment rate and US data that includes the NFIB small business index, JOLTS job openings and IBD/TIPP economic optimism of note.
  • China’s consumer and producer price indices are also expected early on Wednesday morning.

LME snapshot at 02.49am London time
Latest three-month LME prices
  Price ($ per tonne)  Change since yesterday’s close ($)
Copper 7,131 6
Aluminium 2,179.50 4.50
Lead 2,601 -3
Zinc 3,388.5 2.5
Tin 19,930 -70
Nickel 12,600 65

SHFE snapshot at 10.55am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne)  Change since yesterday’s close (yuan)
Copper 54,730 40
Aluminium 14,935 0
Lead 19,580 175
Zinc 26,305 245
Tin 144,240 -370
Nickel 99,310 820

Changjiang spot snapshot on January 9
  Range (yuan per tonne)  Change (yuan)
Copper  54,470-54,490 120
Aluminium 14,690-14,730 -10
Zinc 26,300-27,100 280
Lead 19,400-19,600 150
Tin  142,500-144,500 0
Nickel  98,200-98,700 1,050
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