LIVE FUTURES REPORT 15/06: LME nickel edges higher, but prices under pressure from strong dollar

Base metals prices on the London Metal Exchange were mostly lower again during morning trading on Friday June 15, despite nickel recouping some of its losses.

After falling over $300 per tonne on Thursday, nickel is the only base metal to be trading in positive territory so far today.

The three-month price is currently trading back above the $15,300 per tonne mark but continues to find significant resistance above $15,300 per tonne.

“[It is] indication that there is strong overhead selling and bulls are too exhausted… selling momentum has taken back control of the complex and judging by its technical indicators, there is no ruling out further price weakness in the short term,” Andy Farida, Metal Bulletin analyst said.

The rest of the complex continues to trade lower with the strong dollar weighing on metals prices as the dollar index continues to hold above 94.00. The index has been supported by the US Federal Open Market Committee announcement of a 25-basis-point-rise in interest rates at its meeting on Wednesday.

Copper is down to a low of $7,168.50 per tonne, following Thursday’s 1.1% decline. The red metal is pulling away from the near-five-year high it reached earlier this month despite persistent backwardations in the forward spreads.

The LME June-July spread is in $1.50 per tonne backwardation, while the July-August is in $2.50 per tonne backwardation.

“Copper is still in a good position above $7,000 per tonne, but eyes remain on the negotiations at Escondida which could flip the price either way. But this level is a good place for it to stabilize” a trader said.

Elsewhere in the complex, the aluminium price remains steady, with focus on the squeeze in the forward spreads. The LME June-August spread remains at $27 per tonne backwardation.

Base metals prices

• The three-month copper price fell $34.50 to $7,142.50 per tonne. Stocks increased a net 1,150 tonnes to 294,700 tonnes.
• Aluminium’s three-month price was down $10.50 to $2,245.50 per tonne. Inventories fell 5,400 tonnes to 1,142,600 tonnes.
• The three-month nickel price increased $30 to $15,315 per tonne. Stocks edged 72 tonnes higher to 276,384 tonnes.
• Zinc’s three-month price declined $29.50 to $3,157.50 per tonne. Inventories were 2,100 tonnes to 241,450 tonnes.
• The three-month lead price edged $2 higher to $2,455 per tonne. Stocks declined 400 tonnes to 131,785 tonnes.
• Tin’s three-month price was $60 lower at $20,820 per tonne. Inventories were unchanged at 2,595 tonnes. 

Currency moves and data releases

• The dollar index was down 0.02% to 94.80.
• In other commodities, the Brent crude oil spot price was down 0.14% to $75.77 per barrel.
• In US data on Friday, we have industrial production, TIC long term purchase, Empire State Manufacturing Index numbers due out.