LIVE FUTURES REPORT 15/11: SHFE base metals prices slump as wave of selling continues; nickel plunges 5%

The most-traded May nickel contract on the SHFE stood at 95,050 yuan ($14,317) per tonne as of 10:50am Shanghai time, down 4,560 yuan from the previous session’s close, with around 900,000 lots changing hands so far. The price had dipped as low as 94,650 yuan earlier in the day, the lowest since October 31 and a 5% drop from the previous day’s close.

Open interest for the contract fell to 414,282 positions as of 10:15am Shanghai time, from 460,264 positions at Tuesday’s close as longs liquidated.

“Markets had a risk-off feel overnight with equities, yields, US dollar and commodities all heading lower,” ANZ Research said on Wednesday.

The sell-off in base metals was likely to be due to concerns over the slowing growth in the Chinese economy, market observers said.

While the key Chinese economic data for October released on Tuesday were close to expectations, the growth rates had slowed compared with the previous month.

China’s industrial production grew 6.2% year on year in October, down from 6.6% in September, while fixed asset investment growth in the January-October period slowed to 7.3% on an annual basis compared with growth of 7.5% in January-September.

China’s retail sales for October surprised to the downside with year-on-year growth of 10%, which was below the expected print of a 10.5% increase and lower than September’s growth of 10.3%.

Meanwhile, the most-traded January copper contract on the SHFE fell 1,080 yuan to 52,950 yuan per tonne, with around 326,000 lots changing hands so far.

“The [earlier] rise in copper prices was not supported by fundamentals and with weak Chinese macroeconomic data, there is a large risk of short-term correction for copper prices,” China’s Galaxy Futures said late on Tuesday.

The SHFE copper price had risen as high as 54,450 yuan per tonne on November 13, the highest since November 7.

Rest of SHFE metals in negative territory

• The most-traded January aluminium contract fell 40 yuan to 15,430 yuan per tonne.
• The most-traded January zinc contract dipped 640 yuan to 25,120 yuan per tonne.
• The most-traded December lead contract decreased 485 yuan to 18,630 yuan per tonne.
• The most-traded January tin contract slipped 1,380 yuan to 142,630 yuan per tonne.

Currency moves and data releases

• The dollar index fell 0.05% to 93.82 as of 10:49am Shanghai time.
• In other commodities, the Brent crude oil spot price dipped 0.11% to $61.44 per barrel as of 10:50am Shanghai time.
• In equities, the Shanghai Composite index was 0.39% lower at 3,416.21.
• In US data on Tuesday, the NFIB small business index for October came in below expectations at 103.8 but above the previous reading of 103. The October producer price index (PPI) and core PPI both came in at 0.4% for October, higher than expectations of 0.1% and 0.2%, respectively.
• Key economic data of note later today includes the consumer price index (CPI), core CPI, core retail sales, retail sales and Empire State manufacturing from the United States. The inflation data will be keenly watched as a weak showing could cap the dollar’s upside and raise doubts on a US interest rate rise in December.