LIVE FUTURES REPORT 12/02: SHFE nickel prices start the week strongly; aluminium slips

Base metals prices on the Shanghai Futures Exchange are off to a mixed start this week, with nickel prices leading on the upside with a gain of 1%, while zinc, copper and lead prices are little changed and tin and aluminium prices are down by 0.5% and 0.9% respectively.

Firm demand from China’s stainless steel sector is lending support to nickel prices this morning, Monday February 12, with the most-traded SHFE May nickel contract trading at 99,800 yuan ($15,854) per tonne as of 10.00 am Shanghai time, up by 1,030 yuan per tonne compared with last Friday’s close.

“Demand from the stainless steel sector remains strong; world stainless steel melting production increased 7.4% year on year in January-September 2017, the latest figures from the International Stainless Steel Forum show,” Metal Bulletin analyst James Moore said.

Tightened availability of nickel stocks is also underpinning prices.

“Nickel stocks in Shanghai-bonded warehouses decreased to only 19,000-24,000 tonnes at the end of January because recent tax changes limited inflow and triggered a surge of material delivered into the domestic market,” Moore added.

Metal Bulletin’s assessment of nickel stocks in Shanghai-bonded warehouses decreased to 19,000-24,000 tonnes on January 31, down 30.6% from 28,000-34,000 tonnes on January 3 and 67.9% lower on an annual basis.

Lead edges higher, declining stocks support

  • Lead was the only other metal to log any gains this morning, albeit marginal ones.
  • The SHFE March lead contract price increased by 35 yuan or 0.2% to 19,075 yuan per tonne, with declines in SHFE and London Metal Exchange stocks supporting.
  • Lead stocks at SHFE warehouses fell for a third consecutive week last week, with a week-on-week decline of 2,892 tonnes or 8.5% to 31,110 tonnes on Friday.
  • Also on Friday, lead was the only base metal traded on the LME to close in positive territory; the three-month LME lead price closed $10 higher at $2,534 per tonne, while inventories declined 1,675 tonnes to 125,275 tonnes.

Aluminium pressured by rising stocks; others unchanged to weaker

  • The SHFE April zinc contract price was flat at 26,120 yuan per tonne.
  • The SHFE March aluminium contract price decreased by 125 yuan or 0.9% to 14,060 yuan per tonne, with prices pressured by rising stock levels.
  • Aluminium stocks in SHFE warehouses rose by 8,424 tonnes or 1.1% week on week to 803,742 tonnes as of last Friday, while LME stocks increased by 38,925 tonnes to 1,097,100 tonnes.
  • The SHFE April copper contract slipped by 60 yuan or 0.1% to 51,500 yuan per tonne.
  • The SHFE May tin contract price fell by 690 yuan or 0.5% to 146,510 yuan per tonne.

Currency moves and data releases

  • The dollar index decreased by 0.16% to 90.19 as of 10.41 am Shanghai time.
  • In other commodities, the Brent crude oil spot price was up by 0.85% at $63.43 per barrel as of 10.42 am Shanghai time.
  • In equities, the Shanghai Composite was up by 0.1% at 3,132.85 as of 10.46 am Shanghai time.
  • In data on Friday, China’s consumer price index (CPI) and producer price index (PPI) were in line with expectations with increases of 1.5% and 4.3% respectively from a year earlier.
  • Similarly, the UK’s manufacturing production index for December was flat with forecasts at 0.3%.
  • Meanwhile, the UK’s trade deficit grew in December; official figures showed the gap between exports and imports rose to £13.6 billion ($18.8 billion) at the end of last year.
  • There are no major data releases today, but market participants will likely be keeping a close eye on the release of consumer inflation data from the United States later this week.
  • “US CPI data are likely to be the focus for markets this week given that inflation worries have been one of the triggers behind the recent equity and bond tumult,” ANZ Research noted on Monday.
LME snapshot at 02.00 am London time
Latest three-month LME Prices

Price ($ per tonne) Change since yesterday’s close ($)
Copper 6,841 86
Aluminium 2,127 4
Lead 2,531.5 -2.5
Zinc 3,408 23
Tin 21,190 165
Nickel 13,105 135

SHFE snapshot at 10.00 am Shanghai time
Most-traded SHFE contracts

Price (yuan per tonne) Change since yesterday’s close (yuan)
Copper (April) 51,500 -60
Aluminium (March) 14,060 -125
Zinc(April) 26,120 0
Lead(March) 19,075 35
Tin (May) 146,510 -690
Nickel (May) 99,800 1,030

Changjiang spot snapshot on February 12

Range (yuan per tonne) Change (yuan)
Copper 51,310-51,330 10
Aluminium 13,840-13,880 -90
Zinc 26,040-26,840 -80
Lead 19,050-19,250 0
Tin 146,500-147,500 -1,250
Nickel 99,200-99,600 100
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