LIVE FUTURES REPORT 12/10: SHFE nickel, copper up on fundamentals; other metals weaker

Base metals were mixed on the Shanghai Futures Exchange (SHFE) during Asian morning trading on Thursday October 12, with nickel leading the gainers amid strong fundamental support; while zinc was this morning’s biggest loser, pressured by the continued rise in London Metal Exchange inventories.

The most-traded January nickel price rose 1.5% as of 03:20 BST, outperforming the other base metals on the SHFE on the prospect of a pick-up in demand from steel markets as a result of rising steel prices.

“Purchases [of nickel] from steel markets will increase after the cautious, watchful attitude seen in the market before [China’s] Golden Week holiday since steel prices have risen as a result of supply constraints in China,” an analyst at Guotian Jun’an said.

“Copper and nickel are the two metals where prices are still quite below the highs seen earlier in the year so they may not be attracting the same scale-up selling as the metals that have been setting fresh highs recently,” senior analyst Metal Bulletin analyst William Adams said.

The SHFE’s most-active December zinc contract dropped by 1.4% as of 3:20 BST, making it the big loser in the base metals complex.

“Needless to say, [it is] no surprise [that] zinc prices are down the most, given the stock increase and the pick-up in stock increases in recent days,” Adams said.

Zinc inventories on the LME increased a net 68,800 tonnes in September and continued to rise into October, with an increase of 7,875 tonnes, 2,200 tonnes and 6,550 tonnes during October 9-11.

SHFE copper underpinned by positive economic outlook, fundamental support

  • The SHFE’s most-traded December copper contract rose to 52,930 yuan ($8,044) per tonne as of 03:20 BST, up 490 yuan from last session’s close.
  • The International Monetary Fund raised its global growth forecast by 0.1 percentage points from its April and June estimates, to 3.6% for 2017 and to 3.7% for 2018, driven by a pick-up in trade, investment and consumer confidence.
  • Copper stocks on the SHFE declined a net 908 tonnes to 14,777 tonnes, while inventories on the LME decreased 2,950 tonnes to 26,925 tonnes on Wednesday.
  • 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 estimated.

Base metals prices

  • The SHFE January nickel price surged 1,330 yuan from the previous session’s close to 89,300 yuan per tonne.
  • The SHFE December aluminium contract was marginally up 5 yuan to 16,335 yuan per tonne.
  • The SHFE December lead contract inched down 15 yuan to 20,650 yuan per tonne.
  • The SHFE January tin price decreased 390 yuan to 145,370 yuan per tonne.
  • The SHFE December zinc contract stumbled 365 yuan to 25,770 yuan per tonne.
  • In industry news, Peruvian zinc production during January-August increased 11% to 946,429 tonnes from the same period in 2016.

Currency moves and data releases

  • The dollar index was down 0.14% to 92.84 so far today.
  • In other commodities, the Brent crude oil spot price was down 0.12% to $56.59 per barrel, and the Texas light sweet crude oil spot price decreased 0.03% to $51.02.
  • In equities, the Shanghai Composite Index was down 0.17% to 3,382.49.
  • In data today, we have US weekly jobless claims and September’s producer price index , as well as EU industrial production figures for August.
  • In addition, European Central Bank president Mario Draghi and US Federal Open Market Committee members Lael Brainard and Jerome Powell are speaking.
LME snapshot at 0321 London time
Latest 3M LME Prices
Price ($/t) Change since yesterday’s close ($)
Copper 6,803 3
Aluminium 2,134 4
Lead 2,539 -26
Zinc 3,212 -7
Tin 20,730 -140
Nickel 11,140 5
SHFE snapshot at 0320 London time
Most traded SHFE contracts
Price (yuan/t) Change since yesterday’s close (yuan)
Copper 52,930 490
Aluminium 16,335 5
Zinc 25,770 -365
Lead 20,650 -15
Tin 145,370 -390
Nickel 89,300 1,330

Changjiang spot snapshot on Thursday October 12
Range (yuan/t) Change (yuan)
Copper 53,630—53,650 900
Aluminium 16,050—16,090 -70
Zinc 26,500—27,300 -480
Lead 21,250—21,450 -400
Tin 143,000—144,500 -1,000
Nickel 89,550—90,350 1,000
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