LIVE FUTURES REPORT 09/08: SHFE nickel continues to gain on bullish sentiment

Base metals prices on the Shanghai Futures Exchange were broadly up during morning trading on Friday August 9 as the Chinese yuan stabilized, with nickel continuing to push higher amid bullish sentiment.

“The markets have regained some semblance of composure after the People’s Bank of China’s countercyclical efforts temporarily tamed the yuan beast, but this probably won’t stop traders from pressing the USDCNH envelope higher after the Pboc signalled there is no line in the sand,” Stephen Innes, Managing Partner from VM Markets said in a morning note.

“But it’s Friday, and at least for today the amenable tone on both the trade a currency war fronts has triggered a very convincing short-covering stock market rally overnight,” Stephen Innes added.

Nickel had the best performance among the SHFE base metals this morning, with the metal’s most-traded October contract climbing to 126,440 ($17,936) yuan per tonne as at 11.09am Shanghai time, up by 1.2% from Thursday’s close of 124,890 yuan per tonne.

The rise in the nickel price came despite analysts downplaying speculation that Indonesia will tighten its policy on ore exports.

“Nickel prices are not being set by fundamentals at the moment and the recent talksthat Indonesia will curb supply before 2022 is pretty much hype,” a Shanghai-based analyst said.

“Supply and demand can’t justify the drastic movement these days [and] most people including myself think it’s a technical thing and big money is behind all this,” the analyst added.

Other highlights:
– The dollar index was down by 0.11% at 97.58 as at 11.15am Shanghai time.
– The Shanghai Composite Index was down by 0.09% at 2,792.09 as at 11.00am Shanghai time.
– In data on Thursday, China’s dollar-denominated trade surplus narrowed to $45.1 billion from $51 billion previously, but beat the expected surplus of $43.2 billion.
– In data on today, China’s Consumer Price Index (CPI) and Producer Price Index (PPI) numbers are of note.