LIVE FUTURES REPORT 13/10: SHFE nickel leads base metals higher on strong fundamentals, weaker dollar

The most-traded January nickel contract was up 1.29% as of 03:20 BST this morning as an ongoing curb in Chinese output continues to support prices, while demand from steel producers remains strong.

“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.

The weaker dollar as a result of less hawkish comments from Federal Open Market Committee minutes on Wednesday also lent support to SHFE base metals prices.

All other SHFE base metals, with the sole exception of lead, were also in positive territory.

SHFE copper up amid fundamental support

• SHFE most-traded December copper prices rose to 53,220 yuan ($8,078) as of 3:20 BST, inching up 10 yuan from the previous session’s close.
• Copper has seen sustained buying after Chinese investors returned from an extended break on Tuesday, buoyed by Chinese market participants’ growing optimism ahead of the upcoming 13th Five-Year Plan meeting at the 19th Party Congress in Beijing next week.
• “The stock rise and wider spreads of late also suggest plentiful availability so there should be little need for buyers to chase prices higher, although they seem to be doing so anyway,” Metal Bulletin senior analyst William Adams said.
• “(Copper) has had its reaction to the August gains, built a base, and looks good for another test of the resistance [overhead],” a trader said.
• “Copper is really looking to have a go at the psychological $7,000 [on the LME] level now,” another trader said.
• 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 estimates.

Most SHFE base metals rise, except lead

• The SHFE January nickel price rallied 1,170 yuan to 91,590 yuan per tonne as of 03:20 BST.
• The SHFE December aluminium contract rose 90 yuan to 16,540 yuan per tonne.
• The SHFE December zinc contract edged up 10 yuan to 26,080 yuan per tonne.
• The SHFE January tin price was up 20 yuan to 146,340 yuan per tonne.
• The SHFE November lead contract inched down 25 yuan to 20,705 yuan per tonne.

Currency moves and data releases 

• The dollar index is down 0.13% to 92.97 so far today.
• In other commodities, the Brent crude oil spot price was up 0.14% to $56.47 per barrel, and the Texas light sweet crude oil spot price increased 0.22% to $50.85.
• In equities, the Shanghai Composite Inex was up 0.14% to 3,390.89.
• Data out today include US September consumer price index and retail sales numbers and the results of the preliminary University of Michigan Consumer Sentiment Survey for October.
• In addition, FOMC members Robert Kaplan and Charles Evans are speaking.