LIVE FUTURES REPORT 11/04: Disappointing China data weighs on SHFE base metals prices

Copper prices on the Shanghai Futures Exchange edged up during Asian morning trading on Wednesday April 11, with the red metal continuing to benefit from an easing in global trade tensions. But the release of disappointing Chinese data earlier this morning has dampened sentiment slightly, putting a cap on copper’s gains and pushing some of the other metals downward.

The most-traded June copper contract on the SHFE rose to 51,340 yuan ($8,160) per tonne as of 11.10am Shanghai time, up by 170 yuan from the previous session’s close.

Base metals had been supported by an easing in global trade tensions following the conciliatory tone struck by Chinese President Xi Jinping during his opening address at the Boao Forum for Asia annual conference on Tuesday, as well as his pledge to further open the Chinese economy.

Tensions eased further after US President Donald Trump tweeted his appreciation for Xi’s “kind words” on tariffs and the reduction of automobiles barriers, adding that the two “will make great progress together”.

“The risk rally accelerated after President Xi’s speech eased fears of a trade war and Trump took to twitter to express his appreciation,” ANZ Research said.

“The risk-on tone saw investor appetite for base metals return strongly,” the bank added.

“Market sentiment has improved, and open interest for forward month contracts have risen sharply over the past two trading days,” Citic Futures Research noted.

Putting a dampener on the more positive outlook for the base metals was the release of weaker-than-expected Chinese economic data this morning, which renewed fears of a broader slacking in the country’s economic growth this year.

China’s consumer prices were up just 2.1% year on year last month, beneath both expected and previous readings of 2.6% and 2.9% respectively, according to the country’s National Bureau of Statistics.

Meanwhile, China’s producer prices in March were also shy of forecasts, gaining an annual 3.1% against expected growth of 3.2% and a previous increase of 3.7% in February.

Zinc and nickel tick higher, others under pressure

  • The SHFE June aluminium contract dipped 25 yuan to 14,325 yuan per tonne.
  • The SHFE June zinc contract gained 15 yuan to 24,515 yuan per tonne.
  • The SHFE May lead contract fell 5 yuan to 18,485 yuan per tonne
  • The SHFE May tin contract dropped 320 yuan to 144,330 yuan per tonne.
  • The SHFE July nickel contract surged 610 yuan to 101,540 yuan per tonne.

Currency moves and data releases

  • The dollar index was down 0.01% at 89.6 as of 11.17am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down 0.26% to $70.81 per barrel as of 11.17am Shanghai time.
  • In equities, the Shanghai Composite was up by 0.54% to 3207.61 at close of morning session at 10.38 Shanghai time.
  • In US data on Tuesday, the headline and core producer price index (PPI) readings for March both exceeded expectations with growth of 0.3%. Final wholesale inventories ticked up by 1%.
  • Later, there is a host of data from the United Kingdom including manufacturing production, goods trade balance, construction output and industrial production. Data of note from the United States includes headline and core consumer price index (CPI) readings, crude oil inventories and the release of the US Federal Open Market Committee (FOMC) minutes.
  • In addition, European Central Bank president Mario Draghi is speaking in Germany.

LME snapshot at 03.19am London time
Latest three-month LME Prices
  Price ($/t)  Change since yesterday’s close ($)
Copper 6,929 -16
Aluminium 2,205 4
Lead 2,391 -1
Zinc 3,243 0
Tin 21,015 140
Nickel 13,660 -35
SHFE snapshot at 11.10am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne)  Change since yesterday’s close (yuan)
Copper  51,340 170
Aluminium 14,325 -25
Zinc 24,515 15
Lead 18,485 -5
Tin  144,330 -320
Nickel  101,540 610

Changjiang spot snapshot on April 11
  Range (yuan per tonne)  Change (yuan)
Copper  51,270—51,290 170
Aluminium 14,210—14,250 50
Zinc 24,680—25,680 50
Lead 18,500—18,700 0
Tin  144,000—145,000 0
Nickel  101,550—102,050 900
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