LIVE FUTURES REPORT 13/11: SHFE base metals prices diverge; nickel, copper under pressure

Base metal prices on Shanghai Futures Exchange diverged during Asian morning trading on Monday November 13, with nickel and copper under pressure while aluminium rebounded.

The most-traded May nickel contract on the SHFE stood at 99,390 yuan ($14,967) per tonne as of 10:38am Shanghai time, down 500 yuan from the previous session’s close, with around 380,000 lots changing hands so far. The SHFE nickel price has eased after reaching a record high of 103,410 yuan per tonne on November 6.

While the demand and supply fundamentals for nickel have not changed, nickel prices have come under pressure on rising stainless steel stocks, falling stainless steel prices and weaker-than-expected stainless steel demand, China’s Galaxy Futures said late last Friday.

Meanwhile, the most-traded January SHFE copper price fell 60 yuan to 53,520 yuan per tonne, with around 107,000 lots traded so far.

“The short-term correction risk for SHFE copper is not over given the sharp rise in SHFE copper stocks,” China’s Ruida Futures said late last Friday.

Deliverable copper stocks at SHFE-approved warehouses rose for a second consecutive week, increasing by 14% or 18,198 tonnes last week to 145,471 tonnes as of Friday November 10.

SHFE copper prices are also under pressure as demand typically slows at the end of the year with the end of the peak demand season during September-October, market observers noted.

Aluminium rebounds

  • The SHFE most-traded January aluminium contract rose 70 yuan to 15,590 yuan per tonne - the price had fallen to as low as 15,160 yuan on November 9, the lowest since August 7.
  • The market is awaiting more news on the production cut status among Chinese smelters planning winter output cuts during November 15 until March 15.
  • “With the 15th nearing, smelters in [China’s Henan province] have started cutting production. But with no news of Shandong smelters cutting production, some doubts have crept in about the extent of production cuts in Shandong,” China’s Minmetals Jingyi Futures said last Friday.
  • On a lack of news on production cuts in Shandong, the broker has lowered its estimation of fourth-quarter Chinese aluminium production cuts to 1.7 million tonnes from 2.7 million tonnes.

SHFE zinc, lead higher; tin lower

  • The most-traded January zinc contract rose 150 yuan to 25,755 yuan per tonne.
  • The most-traded December lead contract increased 65 yuan to 19,355 yuan per tonne.
  • The SHFE most-traded January tin contract decreased 350 yuan to 143,550 yuan per tonne.

Currency moves and data releases

  • The dollar index rose 0.17% to 94.55 as of 11:00am Shanghai time - the index had reached as low as 94.26 last Friday, the lowest since October 26.
  • In other commodities, the Brent crude oil spot price dipped 0.13% to $63.56 per barrel as of 11:01am Shanghai time.
  • In equities, the Shanghai Composite index was 0.35% higher at 3,444.84.
  • Last Friday, China moved towards further financial liberalization as it announced that it was easing foreign ownership limits on banks and allowing foreign firms majority ownership in joint ventures with Chinese securities companies and life insurers.
  • In US data on Friday, the preliminary University of Michigan (UoM) consumer sentiment came in at 97.8, below the forecast of 100.8. Preliminary UoM inflation expectations stood at 2.6%, an increase on the previous figure of 2.4%.
  • The economic agenda is light today with mainly the German WPI of note. Investors will focus on a string of Chinese economic data due from Tuesday onward - these include industrial production, fixed asset investment, retail sales and foreign direct investment.
  • The US October inflation data due on Wednesday will also be keenly watched with anything less than the expected 1.7% year-on-year reading on the core measure will prompt some renewed doubts on the US Federal Reserve raising US interest rates in December and hurt the dollar, National Australia Bank noted.
SHFE snapshot at 1038 Shanghai time
Most-traded SHFE contracts
Price (yuan/t) Change since Friday’s close (yuan)
Copper 53,520 -60
Aluminium 15,590 70
Zinc 25,755 150
Lead 19,355 65
Tin 143,550 -350
Nickel 99,390 -500

LME snapshot at 0238 London time
Latest 3M LME Prices
Price ($/t) Change since Friday’s close ($)
Copper 6,818.50 32.5
Aluminium 2,113.50 12.5
Lead 2,523 4
Zinc 3,216 -3
Tin 19,500 75
Nickel 12,250 140

Changjiang spot snapshot on November 13
Range (yuan/t) Change (yuan)
Copper 53,430-53,450 -20
Aluminium 15,350-15,390 70
Zinc 26,110-26,160 130
Lead 19,150-19,350 100
Tin 142,500-144,000 0
Nickel 98,400-98,600 -950
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