LIVE FUTURES REPORT 16/05: SHFE copper prices weaken on stock increases, dollar strength; other metals diverge

Base metals prices on the Shanghai Futures Exchange diverged during Asian morning trading on Wednesday May 16, with rising stocks and a surge in the dollar sinking copper.

The most-active July copper contract on the SHFE traded at 50,990 yuan ($8,011) per tonne as at 11.01am Shanghai time, down 220 yuan per tonne from Tuesday’s close. Around 161,000 lots of the contract have changed hands so far this morning.

The recent increase in stock levels at exchange-listed warehouses continued to put a lid on SHFE copper prices, industry watchers noted.

Investors remain cautious amid mixed April Chinese economic data and increase in LME copper stocks, China’s Ruida Futures said late on Tuesday.

Copper inventories in SHFE warehouses rose for a second consecutive week in the week ended May 11, reaching a total of 279,525 tonnes. Stocks in London Metal Exchange warehouses increased a net 10,275 tonnes over the past two days to a total of 291,350 tonnes on Tuesday.

On Tuesday, Chinese economic data had come in mixed. China’s fixed asset investment grew at 7% for January-April, below expected growth of 7.4%, while April retail sales gained 9.4%, also below forecasts of a 10% increase. April industrial production, however, surprised on the upside with growth of 7% – 6.4% had been called for.

Meanwhile, after being in a downtrend since May 10, the dollar index rebounded and surged to as high as 93.46 on Tuesday – the highest since December 22, 2017 – on the back of positive US data – see data section below.

“US data releases were solid, implying the economy is accelerating in the early stages of the second quarter,” ANZ Research said on Wednesday.

Base metals prices

  • The SHFE July aluminium contract price increased 45 yuan per tonne to 14,765 yuan per tonne.
  • The SHFE June lead contract price fell 150 yuan per tonne to 19,340 yuan per tonne.
  • The SHFE July zinc contract price gained 60 yuan per tonne to 23,840 yuan per tonne.
  • The SHFE September tin contract price decreased 340 yuan per tonne to 145,950 yuan per tonne.
  • The SHFE July nickel contract price rose 350 yuan per tonne to 107,500 yuan per tonne.

Currency moves and data releases

  • The US dollar index was at 93.31 as at 10.59am Shanghai time, down 0.05% from its previous closing price, after surging as high as 93.46 on Tuesday – the highest since December 22, 2017.
  • In other commodities, the Brent crude oil spot price rose 0.16% to $78.23 per barrel as at 10.59am Shanghai.
  • In equities, the Shanghai Composite fell 0.33% to 3,181.62 as at 10.57 am Shanghai time.
  • In US data released on Tuesday, April core retail sales and retail sales both came in close to expectations at 0.3%. The Empire State manufacturing index for May surprised on the upside with a reading of 20.1, likewise for March business inventories which was flat month on month.
  • A slew of US data is due later today, including building permits, housing starts, capacity utilization rate, industrial production and crude oil inventories.

SHFE snapshot at 11.01am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since previous session’s close (yuan)
Copper (Jul) 50,990 -220
Aluminium (Jul) 14,765 45
Zinc (Jul) 23,840 60
Lead (Jun) 19,340 -150
Tin  (Sep) 145,950 -340
Nickel  (Jul) 107,500 350

LME snapshot at 04.01am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since previous session’s close ($)
Copper 6,822 14
Aluminium 2,327 0
Lead 2,354 6
Zinc 3,079 17
Tin N/A N/A
Nickel 14,465 40

Changjiang spot snapshot on May 16
  Range (yuan per tonne) Change (yuan)
Copper  50,740-50,760 -260
Aluminium 14,630-14,670 70
Zinc 23,990-24,040 140
Lead 19,300-19,500 -100
Tin  144,000-145,500 0
Nickel  107,050-107,150 250
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