LIVE FUTURES REPORT 14/06: SHFE nickel price climbs 1.2%; other metals mixed

Base metals prices on the Shanghai Futures Exchange were split into two camps during morning trading on Friday June 14 while market participants awaited the release of key Chinese economic data later in the day.

Copper, lead and nickel were up by 0.5%, 0.6% and 1.2% respectively, while aluminium (-0.3%), tin (-0.4%) and zinc (-0.6%) all weakened.

Market focus will be firmly on the release of May activity readings from China later on Friday, with participants eager to assess whether there has been any further negative impact on the Chinese economy from the country’s prolonged trade war with the United States.

At the same time, participants will be looking to see if there has been any positive impact from the Chinese government’s recent stimulatory measures.

“Positive [Chinese] data should support commodities,” analysts with ANZ Research said in a morning note.

Nickel was the outperformer this morning as the metal’s price benefitted from potential supply disruptions stemming from floods across the Indonesian island of Sulawesi and strengthening downstream markets.

The most-traded July nickel contract rose to 101,190 yuan per tonne ($14,618) as at 10.57am Shanghai time, up by 1,240 yuan per tonne from Thursday’s close of 99,950 yuan per tonne.

“Nickel ore and nickel pig iron (NPI) exports face disruptions in the short term following flooding in Sulawesi, Indonesia,” Fastmarkets’ analyst James Moore noted.

“Chinese stainless steel prices have ticked higher over the past week… and in the physical market, an open import arbitrage window bolstered premiums in China in the week to Tuesday June 11,” Moore added.

“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,” Moore concluded.

Other highlights

  • The most-traded July copper contract rose to 46,500 yuan per tonne as at 10.57am Shanghai time, up by 230 yuan from the previous close of 46,270 yuan per tonne.
  • News of strike action at Chilean state-owned copper producer Codelco’s Chuqicamata mine has brightened the outlook for the red metal, buoying prices this morning.
  • Zinc was the worst performer of the SHFE base metals on Friday morning, with the metal’s most-traded July contract dropping by 120 yuan per tonne to 20,555 yuan per tonne as at 10.57am Shanghai time.
  • The dollar index was up by 0.03% at 97.06 as at 11.31 am Shanghai time.
  • The Shanghai Composite Index was down by 0.26% at 2,903.10 as at 11.30 am Shanghai time.
  • 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.