LIVE FUTURES REPORT 12/12: SHFE base metals prices broadly higher on strong credit growth in China

The most-traded February copper contract stood at 51,980 yuan ($7,854) per tonne as of 10.40am Shanghai time, up by 660 yuan from the previous session’s close.

Tin was the lone metal in negative territory while the rest of the base metals complex was higher, supported by China’s better-than-expected new loans data release on Monday.

Bank lending in China hit a fresh record after a much stronger-than-expected surge in credit in November. Chinese banks extended 1.12 trillion yuan in net new yuan loans in November, data from the People’s Bank of China (PBOC) showed on Monday, well above analysts’ expectations who had forecast new yuan loans would rise to 800 billion yuan.

Broad M2 money supply, which includes cash, and short- and long-term deposits, increased 9.1% last month, up from the 8.8% gain seen in October, according to the PBOC.

“China’s new yuan loans beat market expectations in November while broad money supply growth quickened in a sign of continued resilience in the economy,” China’s state-owned news agency Xinhua said late on Monday.

Newly added total social financing, a broader measure of new credit in the Chinese economy, reached 1.6 trillion yuan in November, up from 1.04 trillion yuan in October.

Lead was the outperformer on the SHFE this morning with its January contract rising by 2.4%, followed by a 2.1% gain in the May nickel contract.

The February zinc contract price on the SHFE rallied 300 yuan to 24,940 yuan per tonne as of 10.40am Shanghai time, this despite reports that Glencore is preparing to re-open some operations in Australia.

“The company started advertising new jobs, and so the market will be keenly listening to its investor day later this week for details on how much zinc capacity it plans to re-start,” ANZ Research said on Tuesday.

Meanwhile, the most-traded aluminium contract on the SHFE was marginally higher, while tin was this morning’s worst performer and sole metal in negative territory.

Base metals prices

• The SHFE January lead contract price rose 445 yuan to 18,935 yuan per tonne.
• The SHFE May nickel contract price rallied 1,830 yuan to 89,680 yuan per tonne.
• The SHFE February zinc contract price was 300 yuan higher at 24,940 yuan per tonne.
• The SHFE February aluminium contract price edged 25 yuan higher to 14,265 yuan per tonne.
• The SHFE January tin contract price slid 570 yuan to 137,030 yuan per tonne.

Currency moves and data releases

• The dollar index was down by 0.01% at 93.95 as of 11.45am Shanghai time – the index had reached a high of 94.09 on December 8, its highest since November 23.
• In other commodities, the Brent crude oil spot price was up by 0.87% to $65.28 per barrel, and the Texas light sweet crude oil spot price increased by 0.62% to $58.26.
• In equities, the Shanghai Composite was down by 0.57% to 3,303.13.
• In data on Monday, the US October Jolts job openings report eased slightly to 6 million compared with an upwardly revised 6.18 million print in September, which was a record high.
• “Hiring was up 3.8% over the month (from 3.6%) with the quits rate steady at 2.2%. The data suggests the US labor continues to tighten,” ANZ Research noted.
• The economic agenda is busy today with data on the United Kingdom’s consumer prices, producer price input and output, retail prices and house prices. US data out later includes the NFIB small business index, producer prices, core producer prices and the federal budget balance.
• In addition, European Central Bank president Mario Draghi is speaking in Frankfurt, Germany.