LIVE FUTURES REPORT 14/06: LME nickel price outperforms in lackluster trading; Al unmoved amid 25kt fresh cancelation

Nickel’s three-month price on the London Metal Exchange was higher during morning trading on Friday June 14, climbing by just under 1% while the rest of the complex edged lower.

The metal’s futures price has improved throughout the week, but has failed to break above $12,000 per tonne.

Supporting the uptrend however, LME nickel stocks continue to drift lower at 163,122 tonnes on Friday, their lowest level since 2012, while this morning’s fresh cancellation of just under 4,500 tonnes across LME-registered warehouses in Europe and Asia acted as a further tailwind.

Total volumes traded in nickel topped the complex over the morning, with close to 4,000 lots having exchanged hands as at 9.05am London time.

“Chinese stainless steel prices have ticked higher over the past week, but the outlook remains bearish amid a worsening demand outlook, according to our latest Stainless Steels Market Tracker report. Margins remain favorable for the moment, but the threat of production cuts resetting the stainless steel market’s fundamentals remains high,” Fastmarkets analyst James Moore said.

“Despite rising macroeconomic headwinds and the prospect of stainless steel production cuts and in view of the current chart set up, coupled with extremely polarized fund positioning, we believe short-term price risks are skewed to the upside,” he added.

Meanwhile, aluminium’s three-month price traded marginally lower over the morning at a price of around $1,790 per tonne.

This morning’s fresh cancelation of some 24,500 tonnes in Johor and Singapore – in addition to outflows totaling 11,125 tonnes – did little to prompt uptick in the light metal’s outright price.

Elsewhere, with on-warrant LME aluminium stocks now at 681,550 tonnes, some 35% of stocks have now been canceled.

Despite continued queues across LME warehouses to remove the light metal however, financing and storage costs are currently supported by wider contangos across aluminium’s forward spreads, with the cash/three-month spread recently trading in a contango of $31 per tonne, and cash-July spread in a $12.56-per-tonne contango.

Other highlights

  • The US dollar index was down by 0.10% at 97.02.
  • In European data on Thursday, the German final consumer price index was up by 0.2% month on month in May, flat with the previous and forecast prints.
  • Industrial production in the euro area fell by 0.5% month on month in April, according to estimates from the statistical office of the European Union. This was slightly more than the expected 0.4% decline.
  • In US data on Thursday, prices for US imports declined by 0.3% month on month in May, in line with analysts’ forecasts. Unemployment claims in the United States rose more than expected in the week ended June 8, with an increase of 222,000 claims compared with the forecast 215,000 rise.
  • Key data due on Friday includes China’s fixed asset investment, industrial production and retail sales as well as retail sales, capacity utilization, industrial production and the preliminary readings of the University of Michigan’s consumer sentiment and inflation expectations.