LIVE FUTURES REPORT 09/04: LME ali continues surge; copper, nickel climb

Base metals prices on the London Metal Exchange were mostly higher at the close of trading on Monday April 9, with only lead and zinc bucking the trend.

Aluminium’s three-month price climbed the most, increasing 4.2% to close at $2,139 per tonne, the highest since March 6. The price has soared since the Friday April 6 announcement that the US had sanctioned and frozen the assets of Oleg Deripaska and UC Rusal. 

Aluminium volumes rocketed, recording 34,641 lots at the close, the highest since Metal Bulletin’s records began at the beginning of 2009, surpassing the previous record of 34,700 lots on November 11, 2016. 

“The [aluminium] market continued to cover shorts following Friday’s announcement of new US Russian sanctions impacting Rusal. The three-month contract traded up to $2,144 per tonne in high turnover, with nearby spreads aggressively borrowed as traders show concern over future supply dynamics,” Sucden Financial’s close report said. 

The metal’s cash/three-month spread moved into a $16 per tonne backwardation from the $22 per tonne contango at the close on Friday. 

“While the strong rebound supports us in our view that the bull market in aluminium is set to prevail this year, we are cautious about the current rally’s sustainability, which was driven by short-covering at the start of the week,” Boris Mikenikrezai, analyst at Metal Bulletin said. 

“We think aluminium prices are likely to remain volatile in the coming days as a result of a tense geopolitical backdrop; an ongoing trade dispute between the US and China; and a fragile global risk appetite,” he added. 

Copper follows higher
Copper followed aluminium higher and reached a high of $6,853 per tonne shortly after the close of trading. The metal has continued to rebound after dropping down to $6,600 per tonne in March on increased stock levels. 

The three-month nickel price climbed $160 per tonne, edging closer to the $13,500 per tonne barrier. It is being supported by continued strong demand in the global stainless steel sector. 

Elsewhere, lead and zinc bucked the trend to close in negative territory despite a declining dollar index. 

Zinc is feeling pressure from higher on-exchange stocks, which recorded a 45.7% increase during the first three months of 2018, yet the metal’s losses are buoyed by consistent closes within the $3,200-3,300 per tonne support level.

Ali continues to surge 

  • The three-month copper price was $61 higher at $6,830 per tonne. Stocks rose a net 1,425 tonnes to 372,175 tonnes with fresh cancellations of 4,925 tonnes in Kaohsiung and 1,325 tonnes in Rotterdam. 
  • Aluminium’s three-month price increased $97 to $2,139 per tonne. Stocks dipped 6,775 tonnes to 1,254,125 tonnes. 
  • The three-month nickel price was up $160 at $13,435 per tonne. Stocks were down 1,458 tonnes to 315,870 tonnes. A fresh cancellation of 7,050 tonnes took place in Rotterdam. 
  • Zinc’s three-month price was down $20.50 at $3,211.50 per tonne. Inventories fell 2,125 tonnes to 203,225 tonnes. 
  • The three-month lead price was down $8 at $2,385 per tonne. Stocks were down 50 tonnes to 129,175 tonnes.
  • Tin’s three-month price rose $130 to $21,180 per tonne. Inventories dropped 5 tonnes to 1,995 tonnes.

Currency moves and data releases

  • The dollar index was down 0.26% at 89.89.
  • In other commodities, Brent crude oil was up 2% at $68.35 per barrel. 
  • Major data scheduled for later in the week includes China’s consumer and producer price indices and the US consumer price index, due for release on Wednesday.
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