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

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.