LIVE FUTURES REPORT 13/11: SHFE base metals prices retreat; nickel bucks trend with 1% gain

Barring those for nickel, base metals prices on the Shanghai Futures Exchange fell during the morning trading session on Wednesday November 13 while investors awaited clarity on the first phase of a trade deal between China and the United States.

Trade uncertainty continues to dictate the mood in markets this morning, with investors none the wiser on details of a possible agreement between China and the US following a speech by US President Donald Trump on Tuesday.

Trump told the Economic Club of New York on Tuesday that Beijing wants to make a trade deal, but he offered few details on how the negotiations were progressing.

“We’re close,” Trump said. “A significant phase one trade deal with China could happen. Could happen soon. But we will only accept a deal if it’s good for the United States and our workers and our great companies.”

Trump also said that he would raise tariffs on Chinese goods “very substantially” if China does not make a deal with the US, adding that “that’s going to be true for other countries that mistreat us too”.

The US president avoided commenting on whether a rollback in tariffs is part of a phase one deal, merely saying that he would only agree to what is beneficial for US businesses.

“At this point, the market may have to wait until the actual signing of a deal (or not) to get confirmation on tariff rollbacks. And while the markets are still in the demilitarized trade war zone, investors remain in tariff rollback limbo,” Stephen Innes, Asia Pacific market strategist at AxiTrader, said in a morning note.

As a result, the majority of the most-traded base metals contracts on the SHFE were down this morning compared with their closes on Tuesday: January copper (-0.5%), December aluminium (-0.1%), January zinc (-1.3%), January lead (-0.5%) and January tin (-1.2%).

Nickel shrugged off the weaker tone, however, with its most-traded February contract rising to 123,010 yuan ($17,554) per tonne as at 9.51am Shanghai time, up by 1,260 yuan per tonne – or 1% – from a close of 121,750 yuan per tonne on Tuesday.

“The nickel market continued to experience wild swings in prices as the ever-changing political scene in Indonesia creates uncertainty,” ANZ Research analyst David Plank said in a morning note.

“Prices were under pressure last week after Indonesia lifted the ban on exports of nickel ore. But, nickel pushed higher overnight after more than two dozen miners agreed to a voluntary halt of shipments beginning 1 January,” Plank added.

Other highlights

  • The dollar index, which gauges the strength of the US currency against a basket of foreign currencies, was down by 0.02% at 98.31 as at 9.51am Shanghai time.
  • In data on Tuesday, the United Kingdom’s unemployment rate was at 3.8%, below the forecast 3.9% while thinktank ZEW’s readings of economic optimism was -2.1 in Germany and -1 in the European Union, beating expectations of -13.2 and -11.5 respectively
  • In data on Wednesday, the UK and US will release their consumer price indices, the European Union’s industrial production is due and US Federal Reserve chair Jerome Powell will testify on the economy before the Joint Economic Committee, in Washington DC.