LIVE FUTURES REPORT 11/11: SHFE base metals prices mostly drift downward; tin up 0.5%

The subdued performance by the base metals comes after United States President Donald Trump told reporters at the end of last week that China was pushing for the removal of some tariffs as part of an agreement, but he said a “complete rollback” was off the table.

“They’d like to have a rollback,” Trump said. “I haven’t agreed to anything. China would like to get somewhat of a rollback, not a complete rollback because they know I won’t do it.”

This reversed the optimism that had been growing following comments from China that it had discussed the rolling back of tariffs as part of an initial trade deal with the US.

While Trump’s comments suggest that he is still open to at least a partial rollback of tariffs on Chinese goods, the mixed messages and accompanying uncertainty is weighing on global risk sentiment this morning.

As a result, the base metals traded on the SHFE were broadly down from their Friday closes: January copper (-0.2%), December aluminium (-0.4%), December lead (-0.3%) and December nickel (-0.3%).

December zinc and January tin bucked the general weakness however, with gains of 0.1% and 0.5% respectively.

The most-traded January tin contract on the SHFE rose to 137,890 yuan ($19,707) per tonne as at 9.47am Shanghai time, up by 710 yuan per tonne from Friday’s close of 137,180 yuan per tonne.

The strength in tin follows a standout performance by the metal’s three-month price on the London Metal Exchange on Friday. LME tin closed at $16,700 per tonne – its highest price since October 29.

“The combination of refined production cuts in both China and Indonesia (officially announced on September 5 – although we think they have been taking place since early in the third quarter) and a possible stabilization of the semiconductor sector (thanks to a de-escalation of US-China trade tensions) could result in a drawdown of London Metal Exchange inventories and constrain metal availability,” Fastmarkets analyst Boris Mikanikrezai said.

“In turn, this would push tin prices higher,” Mikanikrezai added.

Other highlights

• The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.03% at 98.36 as at 9.47am Shanghai time.
• The Shanghai Composite Index was down by 1.22% at 2,928.04 as at 11.30 am Shanghai time.
• In data over the weekend, China’s consumer price index (CPI) rose by 3.8% year on year in October, outstripping the expected 3.2% increase. The producer price index (PPI) fell by 1.6% over the same comparison, slightly more than the forecast 1.5% decline.
• In data on Monday, there is a host of releases from the United Kingdom that include preliminary gross domestic product (GDP), manufacturing production, construction output and industrial production.