LIVE FUTURES REPORT 09/11: Most SHFE base metals prices up on positive Chinese economic data

Most base metals prices on the Shanghai Futures Exchange were up during Asian morning trading on Friday November 9, buoyed by the modest pick-up in risk-on sentiment following China’s release of positive economic data for October.

Data from China’s General Administration of Customs showed October exports up by 15.6% year on year compared to the 14.5% growth seen in September, and higher than the forecast of 11%. Imports also increased by 21.4% year on year, up from 14.5% last month and more than the expected rise of 14%.

Additionally, China’s trade surplus in October was seen at $34 billion, up from $31.7 billion in September, but slightly lower than the expected $35 billion.

The narrowing trade surplus with the United States, however, cast a shadow in this otherwise bright economic picture. China’s trade surplus with the US in October stood at $31.78 billion, compared with $34.13 billion in the previous month, possibly reflecting concerns over the US-China trade war that has dragged on this year. Lack of actual progress in talks between the two world economies has left investors cautious and sensitive to rhetoric-induced market volatility.

The base metals complex was split again, with aluminium and nickel going against the upward trend. Aluminium’s most-traded January contract price fell 0.2% and nickel’s most-traded December contract price dropped 0.1%.

Fastmarkets analyst Andy Farida noted in his Aluminium Today report that demand for this metal has been badly affected by the prolonged US-China trade spat, with US President Donald Trump mulling additional taxes for China.

Also, he said that the latest Chinese winter production restrictions will not be as stringent as expected because a number of state producers have met the regulated emission standards.

“The potential extra supply from China has dampened interest on the light metal even at this discounted price level,” he said. “In light of the supply uncertainty and fragile demand outlook, this has kept most market participants on the sideline, with most waiting for further clarity before taking a more aggressive stance.”

The other base metals registered gains. Lead showed the biggest jump of 1.4% for its most-traded December contract price, followed by tin, with a 0.7% increase for its most-traded January contract price. Zinc’s and nickel’s most-traded January contract price went up by 0.3% and 0.1%, respectively.

Base metals prices

  • The SHFE January nickel contract was up 60 yuan per tonne to 97,220 yuan per tonne.
  • The SHFE January zinc contract increased 65 yuan per tonne to 20,845 yuan per tonne.
  • The SHFE December lead contract rose 260 yuan per tonne to 18,725 yuan per tonne.
  • The SHFE January tin contract was up 1,050 yuan per tonne to 148,710 yuan per tonne.
  • The SHFE December copper contract decreased 40 yuan per tonne to 49,480 yuan per tonne.
  • The SHFE January aluminium contract dropped 25 yuan per tonne to 13,920 yuan per tonne.

Currency moves and data releases

  • The dollar index was up slightly at 96.65 as at 9.16am Shanghai time.
  • In other commodities, the Brent crude oil spot price was at $70.70 per barrel as at 9.21am Shanghai time.
  • In equities, the Shanghai Composite Index was down 1.29% to 2,601.52 as at 11.30am Shanghai time.
  • In EU data Thursday, Germany’s trade balance for the October period showed a surplus of €17.6 billion ($20.05 billion), while France’s trade balance for the same period showed a deficit of €5.7 billion.
  • In the US, weekly unemployment claims stood in-line with expectations at 214,000.
  • China also reported Thursday that its trade surplus in October rose to $34 billion, higher than the $31.7 billion in September but slightly lower than the expected $35 billion.
  • Today, the National Bureau of Statistics of China published its October Consumer Price Index at 2.5% and the Producer Price Index (PPI) at 3.3%. Both were in line with expectations.
  • Meanwhile, US natural gas storage increased by 65 billion cubic feet, more than the expected 55 billion cubic feet and significantly higher compared to the previous record of 48 billion cubic feet.
  • Additionally, the US is releasing PPI and final wholesale inventories data today.
  • The US Federal Reserve will also be issuing a statement on its interest rate and monetary policy.
  • In Europe, the UK will publish information on its GDP, goods trade balance, industrial production, manufacturing production, construction output, index of services and preliminary business investment.
  • The European Union is expected to release data on French industrial production.