LIVE FUTURES REPORT 11/10: SHFE base metals broadly higher amid IMF’s positive growth outlook

Base metals prices, with the exception of tin, on the Shanghai Futures Exchange (SHFE) were stronger during Asian morning trading on Wednesday October 11, amid renewed optimism in the markets after the International Monetary Fund (IMF) raised its global economic growth forecast.

Zinc led the pack higher this morning, followed by lead, nickel, copper and aluminium, as market sentiment was boosted by the IMF’s forecast that the current broad-based global economic upswing will likely be sustained this year and the next. Tin bucked the uptrend with a marginal decline.

The IMF raised its global growth forecast by 0.1 percentage points to 3.6% in 2017, and to 3.7% for 2018, compared with its April and July outlook, driven by a pick-up in trade, investment and consumer confidence.

Meanwhile, the IMF increased its 2017 China and US forecasts to 6.8% (from 6.7%) and 2.2% (from 2.1%), respectively, according to ANZ Research.

Markets also experienced a boost with the Chinese returning from the Golden Week holiday. However, many will likely await the decisions of the Communist Party Congress meeting next week in Beijing on infrastructure spending, stimulus plans and so on.

A weaker dollar – likely trading defensively ahead of the release of the minutes from the US Federal Open Market Committee’s (FOMC) September meeting later today – also provided support to the base metals complex this morning.

The dollar index was up 0.03% to 93.28 as of 05:04 BST. This comes after the index set a fresh high of 94.27 on October 6 – breaching the August rebound peak of 94.15.

SHFE copper prices up

  • The most-traded December copper contract stood at 52,250 yuan ($7,932) per tonne as of 03:30 BST, up 380 yuan from the previous session’s close.
  • Declining red metal stocks continue to provide to support prices.
  • Deliverable copper stocks on the SHFE fell for a sixth consecutive week on September 29 with inventories declining 38,167 tonnes to 103,151 tonnes.
  • More recently, London Metal Exchange stocks declined a net 1,125 tonnes to 289,875 tonnes on Tuesday.
  • The global refined copper market recorded a deficit of 70,000 tonnes in June, pushing the supply/demand balance to a deficit of 75,500 tonnes between January and June 2017, the International Copper Study Group estimates.

Rest higher, bar tin

  • The SHFE December zinc contract surged 345 yuan or 1.3% to 26,230 yuan per tonne.
  • The SHFE November lead contract rose 205 yuan to 20,855 yuan per tonne.
  • The SHFE January nickel price rallied 690 yuan to 88,090 yuan per tonne.
  • The SHFE December aluminium contract inched up 10 yuan to 16,470 yuan per tonne.
  • The SHFE January tin price dipped 150 yuan to 146,600 yuan per tonne.

Currency moves and data releases

  • The dollar index was up 0.03% to 93.28 as of 05:04 BST.
  • In other commodities, the Brent crude oil spot price was up 0.22% to $56.66 per barrel, and the Texas light sweet crude oil spot price increased 0.33% to $51.03.
  • In equities, the Shanghai Composite was up 0.33% to 3,394.27.
  • In data today, we have August job openings from the USA and the FOMC’s September meeting minutes due, the latter of which will be closely eyed by markets for any language hinting towards a US rate increase in December.
  • In addition, FOMC member Robert Kaplan is speaking.
LME snapshot at 0331 London time
Latest 3M LME Prices
Price ($/t) Change since yesterday’s close ($)
Copper 6,729 -31
Aluminium 2,159.50 -3.5
Lead 2,540 -17
Zinc 3,267.50 -11.5
Tin 20,775 50
Nickel 10,990 -65

SHFE snapshot at 1030 Shangai time
Most traded SHFE contracts
Price (yuan/t) Change since yesterday’s close (yuan)
Copper 52,250 380
Aluminium 16,470 10
Zinc 26,230 345
Lead 20,855 205
Tin 146,600 -150
Nickel 88,090 690

Changjiang spot snapshot on Wednesday October 11
Range (yuan/t) Change (yuan)
Copper 52,730—52,750 230
Aluminium span style="font-size: 24px; font-family: calibri light;">16,120—16,160 -110
Zinc 26,980—27,780 -140
Lead 21,650—21,850 0
Tin 143,500—146,000 -250
Nickel 88,400—89,300 250
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