MethodologyContact usLogin
Leading on the upside was nickel with the metal’s most-traded October contract rising to 126,050 ($17,846) yuan per tonne as at 9.33am Shanghai time, up by 1,160 yuan, or 0.93%, from last Friday’s close of 124,890 yuan per tonne.
Copper, aluminium and lead also were also in positive territory during morning trading, but to lesser extents: October copper (+0.39%), October aluminium (+0.50%), September lead (+0.92%). Zinc and tin, however, bucked the stronger tone exhibited by their peers: October zinc was down 1.39% and September tin fell 1.32%.
The broad strength in the base metals complex this morning was driven by weakness exhibited in the US currency.
The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.06% at 97.52 as at 9.33am Shanghai time. This compared with the recent high of 98.94 recorded on August 1.
Meanwhile, nickel continued to find support from rising supply concerns in response to the broad drop in production in the world’s leading smelters.
“Half-year nickel production results from leading smelters were weak also, indicating supply may not be as robust as the market expected. Glencore reported an 11% decline, which was largely due to outages at Murrin Murrin in Western Australia and Koniambo in New Caledonia. Eramet’s nickel production declined by 3.4% in the first half of 2019, while Nornickel’s refined nickel output was down 4% quarter on quarter in the second quarter after scheduled maintenance, although the company still managed a 6% increase over the first half of 2019 due to a ramp-up at the company’s Kola Peninsula plant and increased raw materials processing at Hajarvalta,” Fastmarkets research analyst Andy Farida said.
“Other supply concerns stem from news that Vale’s New Caledonia finished nickel production fell by 37.2% year on year in the second quarter of 2019. We have seen time and again that supply disruptions in various key nickel producing regions have been price supportive,” Farida added.
Despite the broad strength seen in the base metals this morning, some market participants warned the uncertainties surrounding relationship between the United States and China, the world’s two largest economies, are likely to act as a headwind to the industrial metals.
“Trade tensions continued to drive financial market moves going into the end of the week, with markets very sensitive to reports on the US-China relationship. A risk-off tone hit the markets as President Trump warned that talks scheduled for next month may not take place. Conflicting reports about whether the US would do business with telecommunications firm Huawei also added to the uncertainty,” Jack Chambers, interest rate strategist and economist at Australia and New Zealand Banking Group (ANZ), said in a morning note.
Other highlights