LIVE FUTURES REPORT 09/04: SHFE base metals prices hit by risk-off sentiment; aluminium buoyed by US sanctions against Russia

Base metals traded on the Shanghai Futures Exchange were broadly lower during Asian morning trading on Monday April 9, with risk-off sentiment in the market pressuring prices lower.

Aluminium bucked the general weakness, however, finding support from the news that the United States had announced sanctions against Russia and key Russian firms, including aluminium producer Rusal, at the end of last week.

The most-traded June aluminium contract on the SHFE rose to 14,185 yuan ($2,249) per tonne as of 09.58am Shanghai time, up by 125 yuan from Wednesday’s close.

“[Rusal] is a key supplier of aluminium to the US, and this news sent traders into panic-buying mode,” ANZ Research said on Monday.

“Traders are also worried that the sanctions could impact global trade flows, with the potential impact on non-US aluminium producers still unknown,” the bank added.

SHFE aluminium inventories registered a slight decline of 154 tonnes to 970,233 tonnes as of April 4, the last trading day ahead of China’s Qing Ming Festival, or tomb-sweeping day (April 5-8).

Copper price edges downward on risk-off mood

  • The SHFE May copper contract price dipped 100 yuan to 50,180 yuan per tonne as of 09.58am Shanghai time.
  • Another flare up in trade war rhetoric from US President Donald Trump reignited the risk-off mood across commodities markets.
  • “The market is still overreacting to Trump’s trade rants. Trade tariffs are long overdue however, and should not be a surprise. What Trump says he doesn’t always do, but the sanctions were a major policy statement in his hearing,” John Meyer, analyst at SP Angel, said.
  • Further subduing red metal prices were the rising inventories at SHFE-approved sheds.
  • Deliverable red metal stocks rose a slight 434 tonnes from March 30 to 306,645 tonnes as of April 4.
  • Copper stocks in SHFE warehouses have risen since early this year amid slower demand in the first quarter of the year due to Chinese New Year holidays, but market observers anticipate the inventory uptrend to ease or stop with demand expected to pick up in the second quarter of the year.
  • SHFE copper stocks are now up by 91% since the beginning of the year.

Other base metals track copper lower

  • The SHFE June zinc contract price declined 240 yuan to 24,295 yuan per tonne.
  • The SHFE May lead contract price dropped 110 yuan to 18,530 yuan per tonne
  • The SHFE May tin contract price fell 800 yuan to 146,680 yuan per tonne.
  • The SHFE July nickel contract price slid 1,930 yuan to 98,420 yuan per tonne.

Currency moves and data releases

  • The dollar index was up by 0.05% at 90.17 as of 09.58am Shanghai time.
  • In other commodities, the Brent crude oil spot price was up by 0.39% to $67.26 per barrel as of 09.58am Shanghai time.
  • In equities, the Shanghai Composite was down by 0.14% to 3126.73 as of 10.34 am Shanghai time.
  • In Friday’s data, the US jobs report in March reported 103,000 Americans joined the labor market, below the forecast of 190,000. The unemployment rate ticked up to 4.1%, weekly unemployment claims were at 242,000 – above expectations of 225,000, while the February trade balance was -$57.6 billion, close to the forecast of – $56.9 billion.
  • Today’s economic agenda is light with the United Kingdom’s Halifax house price index and Sentix investor confidence from the European Union.
  • Major data scheduled for later in the week includes China’s consumer and producer price indices, US consumer price index and a US Federal Open Market Committee meeting – all due for release on Wednesday.

LME snapshot at 02.58am London time
Latest three-month LME Prices
  Price ($ per tonne)  Change since yesterday’s close ($)
Copper 6,766.50 -2.5
Aluminium 2,084 42
Lead 21,080 30
Zinc 3,220.50 -11.5
Tin 2,375 -18
Nickel 13,160 -110
SHFE snapshot at 09.58am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne)  Change since previous session’s close (yuan)
Copper  50,180 -100
Aluminium 14,185 125
Zinc 24,295 -240
Lead 18,530 -110
Tin  146,680 -800
Nickel  98,420 -1,930

Changjiang spot snapshot on April 9
  Range (yuan per tonne)  Change (yuan)
Copper  50,360 —50,380 -270
Aluminium 14,040 — 14,080 80
Zinc 24,420 —25,420 -280
Lead 18,550 —18,750 -100
Tin  144,000—145,000 -500
Nickel  98,400 —98,800 -1,550
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