LIVE FUTURES REPORT 09/09: SHFE base metals prices pressured by weak Chinese, US data; Ni up 1.2%

Base metals prices on the Shanghai Futures Exchange were broadly down during morning trading on Monday September 9 with weak data from the United States and China last week weighing on the complex.

US job growth slowed more than expected in August, with data released on Friday showing total non-farm employment rising by 130,000 – missing the forecast gain of 163,000.

This was followed on Sunday by disappointing Chinese trade data for August; China’s exports unexpectedly contract last month with a year-on-year drop of 1%, this compared with analysts’ forecasts for a 3.3% increase over the same comparison.

As a result, China’s trade surplus shrank to $34.83 billion in August from $44.58 billion in July, according to China’s General Administration of Customs.

"[Sunday’s] China trade data unambiguously confirms that softer global demand and US tariffs continued to weigh on China’s export growth,” Stephen Innes, Asia Pacific market strategist from AxiTrader said in a morning note on Monday.

But there was some positive news out of China last week, too, with the People’s Bank of China announcing a 0.5% cut to the reserve requirement (RRR) by 50 basis points for all banks, releasing 900 billion yuan ($126.5 billion) in liquidity to support the country’s flagging economy.

Against this mixed backdrop the majority of SHFE base metals prices were down this morning, but to relatively modest degrees. The most-traded November copper contract fell to 47,350 yuan per tonne as at 10.41am Shanghai time, down by 100 yuan per tonne - or 0.2% - from Friday’s close of 47,450 yuan per tonne.

Rising red metal stocks at SHFE warehouses were a further headwind to prices; SHFE copper stocks climbed 18,183 tonnes week on week to 162,059 tonnes on Friday.

Nickel was the lone SHFE base metal in positive territory on Monday morning, with the most-traded November nickel contract rising by 1,830 yuan per tonne - or 1.3% - from its close on Friday. Nickel prices continue to be supported by concerns over the impact of the Indonesian ban on ore exports.

Other highlights

  • Lead prices were under pressure despite a 16.3% decline in SHFE stocks last week; stocks tumbled by 5,081 tonnes week on week to 25,998 tonnes on Friday.
  • The most-traded October lead contract price fell to 17,430 yuan per tonne as at 10.41am Shanghai time, down by 0.2% from Friday’s close.
  • The US dollar index rose 0.03% to 98.44 as at 10.55am Shanghai time.
  • In US data on Friday, average hourly earnings month on month for the August period came in better than expected at 0.4%, unemployment rate for the August period was in line with expectations at 3.7%.
  • It is a light day for data with the United Kingdom’s gross domestic product and manufacturing production releases of note.
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