LIVE FUTURES REPORT 14/11: SHFE base metals prices mostly lower; copper gains on fresh buying

The most-traded January copper contract on the SHFE stood at 54,110 yuan ($8,152) per tonne as of 10:42am Shanghai time, up 460 yuan from the previous session’s close, with around 305,000 lots changing hands so far. Open interest for the contract was at 177,454 positions as of 10:15am Shanghai time, up from 172,618 positions at Monday’s close.

“The weakness in recent days appears to have instigated some fresh buying from Asia, with volumes on SHFE rising strongly. Copper in particular was hit by an influx of buying in the SHFE night session, which spilled over to the LME day session,” ANZ Research said on Tuesday.

Key economic data from China released on Tuesday morning, which was largely in line with expectations, also provided support to the red metal.

China’s industrial production grew 6.2% year on year in October, slightly below the forecast 6.3%, while fixed asset investment in the January-October period increased 7.3% on an annual basis, in line with expectations. The country’s retail sales for October surprised to the downside with year-on-year growth of 10% – below the expected print of a 10.5% increase.

Aluminium eases as doubts creep in

• The SHFE most-traded January aluminium contract fell 30 yuan to 15,530 yuan per tonne with around 175,000 lots traded so far.
• The decrease comes despite the latest data from the China’s Bureau of Statistics showing primary aluminium production in the country fell 7.5% year on year to 2.55 million tonnes in October. Output rose 3.7% year on year to 27.23 million tonnes in the first ten months of the year.
• SHFE aluminium prices have come under pressure as doubts creep in over the extent of winter production cuts among Chinese smelters from November 15 until March 15 due to a lack of news on further output cuts, particularly in the province of Shandong – China’s largest aluminium production hub.
• “From our understanding from various avenues, we are inclined to believe that winter production cuts in Shandong will be small, or even zero,” China’s Minmetals Jingyi Futures said on Monday.
• On a lack of news on production cuts in Shandong, the broker had lowered its estimation of fourth-quarter Chinese aluminium production cuts to 1.7 million tonnes from 2.7 million tonnes.

Tin higher; rest in negative territory

• The most-traded January zinc contract fell 40 yuan to 25,780 yuan per tonne.
• The most-traded December lead contract decreased 70 yuan to 19,190 yuan per tonne.
• The most-traded May nickel contract slipped 630 yuan to 99,980 yuan per tonne.
• The most-traded January tin contract increased 340 yuan to 144,160 yuan per tonne.

Currency moves and data releases

• The dollar index fell 0.04% to 94.49 as of 10:38am Shanghai time.
• In other commodities, the Brent crude oil spot price dipped 0.22% to $62.93 per barrel as of 10:38am Shanghai time.
• In equities, the Shanghai Composite index was 0.48% lower at 3,431.57.
• Key economic data of note later today includes producer prices from the United States, alongside European Union flash gross domestic product and the German ZEW economic sentiment.
• In addition, European Central Bank president Mario Draghi and Federal Reserve chair Janet Yellen are due to speak later today.
• The US October inflation data to be released on Wednesday will also be keenly watched with anything less than the expected 1.7% year-on-year reading on the core measure likely to prompt some renewed doubts on the US Federal Reserve raising US interest rates in December and hurt the dollar, National Australia Bank noted.