LIVE FUTURES REPORT 13/08: SHFE base metals prices pressured by strong dollar; aluminium supported by workers strike

Base metals prices on the Shanghai Futures Exchange were mixed during morning trading on Monday August 13, with a firmer dollar and uncertainty surrounding escalating global trade tensions fueling a reduction in investors’ appetite for the base metals.

The SHFE base metals were split into two camps with copper, zinc and lead prices weakening, while aluminium, nickel and tin prices showed greater resilience toward the market volatility and managed to secure marginal gains.

Aluminium prices were supported by news of a breakdown in negotiations between Alcoa workers and management leading to industrial action stalling operations at the Pinjarra alumina refinery in Western Australia.

But fresh sanctions from the US against Russia has stirred up further volatility in the aluminium market, which along with the firmer dollar, is stifling any meaningful price gains in the light metal.

The most traded October aluminium contract on the SHFE stood at 14,650 yuan ($2,139) per tonne as at 10.49am Singapore time, up 30 yuan per tonne from last Friday’s close.

The market is also bracing itself for any repercussions stemming from US President Donald Trump’s announcement last Friday of plans to double tariffs on aluminium and steel imports from Turkey to 20% and 50%, respectively.

Still, continued drawdowns of London Metal Exchange aluminium stocks are providing a more bullish outlook for the market, according to Metal Bulletin analyst Andy Farida. LME aluminium stocks stood at 1,149,825 tonnes last Friday, down 35,450 tonnes from 1,185,275 tonnes a week earlier.

Zinc was the worst performer this morning, with its most-traded October contract falling 0.5% to 21,180 yuan per tonne.

“Although Chinese domestic consumers have started looking at the import market amid shortage of refined zinc availability, the rise in the US dollar has affected purchasing capacity,” Farida said.

Base metals prices

  • The SHFE November nickel contract was up 420 yuan per tonne to 113,680 yuan per tonne.
  • The SHFE October zinc contract fell 105 yuan per tonne to 21,180 yuan per tonne.
  • The SHFE September lead contract dipped 20 yuan per tonne to 18,215 yuan per tonne.
  • The SHFE September tin contract was up 370 yuan per tonne to 145,620 yuan per tonne.
  • The SHFE October copper contract rose 30 yuan per tonne to 49,570 yuan per tonne.

Currency moves and data releases

  • The dollar index was up by 0.1% at 96.44 as at 10.49am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down by 0.4% to $72.63 per barrel as at 10.50am Shanghai.
  • In equities, the Shanghai Composite slid 1.73% to 2,746.90 as at 12.22pm Shanghai time.
  • In US data last Friday, the consumer price index (CPI) increased 0.2% in July, which was in line with expectations and quicker than a 0.1% gain in June. In the twelve months through July, the CPI rose 2.9%.
  • There are no major data releases scheduled for Monday.