LIVE FUTURES REPORT 16/10: LME copper rises above $7,000/t, nickel rallies higher

Base metals prices on the London Metal Exchange were higher across the board this morning, Monday October 16, led by a 2.6% climb in copper prices.

The three-month copper price has climbed above $7,000 per tonne for the first time in three years, with the red metal reaching its highest level since August 2014 at $7,111.50 per tonne.

Nickel has tracked the strong performance seen in copper and is trading $65 per tonne higher this morning as it looks set to challenge the $12,000-per-tonne level.

The three-month nickel price has been boosted recently by the ongoing curb in Chinese output and strong demand from steel producers.

Chinese market participants’ growing optimism ahead of the upcoming 13th Five-Year Plan meeting at the 19th Party Congress in Beijing has also played a major role in the higher prices of late.

“The rest of the base metals are trading up in high ground, but there does seem to be supply around that needs to be absorbed before prices can push higher. They remain well placed to extend higher and a rebound in China’s iron ore and steel prices, combined with generally good data may well be enough to keep buying pressure alive,” noted William Adams, Metal Bulletin senior analyst.

Aluminium prices climbed $15 per tonne as 10,800 tonnes were delivered out of LME-listed warehouses across various locations today. Analysts generally agree that aluminium price momentum should persist through the end of the year, thanks to global demand growth as well as Chinese capacity cuts.

Zinc prices also remain strong with cash/three-month spreads still in significant backwardation, most recently at $59 per tonne, while lead followed zinc higher – both climbing over $30 per tonne this morning.

Copper rallies

  • The three-month copper price was most recently trading at $7,060 per tonne, an increase of $178.
  • Stocks increased a net 1,225 tonnes to 285,025 tonnes with 5,975 tonnes freshly cancelled.
  • China imported 1.47 million tonnes of copper ore and concentrates in September, the highest since March, when 1.63 million tonnes was brought into the county. September’s volumes were 2% higher month on month and 6% higher year on year, according to preliminary customs data released on October 13.
  • In September, China’s unwrought copper and copper-fabricated products imports climbed to 430,000 tonnes, matching this year’s high in March.
  • Chilean copper producer Codelco has announced investments of $40 billion until 2026 that will include developing key structural projects and upgrading smelters to meet the country’s stricter environmental regulations.

Base metals prices

  • The three-month aluminium price rose $15 to $2,148.50 per tonne. Stocks declined 10,800 tonnes to 1,218,950 tonnes.
  • Nickel’s three-month price was up $65 to $11,740 per tonne. Inventories increased 216 tonnes to 385,788 tonnes, with 2,460 tonnes freshly cancelled.
  • The three-month zinc price increased $37 to $3,272 per tonne. Stocks were up 975 tonnes to 271,900 tonnes.
  • Lead’s three-month price was $36 higher to $2,566 per tonne. Inventories declined 100 tonnes to 151,975 tonnes.
  • The three-month tin price was up $150 to $20,750 per tonne. Stocks were unchanged at 2,090 tonnes.

Currency moves and data releases

  • The dollar index was recently up by 0.2% to 93.24
  • The Brent crude oil spot price was most recently up by 1.03% to $57.74 per barrel.
  • Data out already shows the Chinese producer price index (PPI) for September climbing 6.9%, after a 6.3% rise previously, while its consumer price index (CPI) dipped to 1.6% from 1.8%, but this lower reading was within market expectations. Meanwhile, Japanese revised industrial production was 2%, down slightly from the initial reading of 2.1%.
  • It is a thin day for economic data with mainly the US Empire State manufacturing index of note.
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