LIVE FUTURES REPORT 17/01: SHFE aluminium, copper prices succumb to selling pressure; zinc, lead supported

Base metals prices on the Shanghai Futures Exchange were in two camps during Asian morning trading on Wednesday January 17, with zinc, lead and tin prices posting marginal gains, while the others pushed lower.

The most-traded March aluminium contract on the SHFE stood at 14,625 yuan ($2,271) per tonne as of 11.31am Shanghai time, down by 120 yuan from the previous session’s close. Close to 205,974 lots of the contract have changed hands so far.

“Aluminium came under additional selling pressure after reports that the production hub of Xinjiang in western China has started boosting shipments of ingots to domestic consumers despite authorities trying to curtail capacity,” ANZ Research noted on Wednesday.

Copper was also under pressure this morning, with its most-traded March contract on the SHFE falling by 450 yuan to 53,850 yuan per tonne.

“After amassing their most-bullish holdings since September and supporting copper prices to their highest in almost three years, money managers have cut their bets on a sustained rally and reduced their net-long positions,” John Meyer of SP Angel said.

“While strong end market consumption developed over last year, there are growing speculations that demand gains may be overwhelmed by new supply from mines that have an increased incentive to boost output,” he added.

“Copper prices have taken the brunt of short selling,” ANZ Research said.

Meanwhile, zinc and lead prices have found slight support amid environmental inspections in China, which have affected production at domestic smelters.

The most-traded March zinc contract on the SHFE rose by 40 yuan to 26,105 yuan per tonne, with around 230,000 lots traded so far. The most-traded March lead contract climbed by 330 yuan to 19,200 yuan per tonne, with around 24,000 lots traded.

“Environmental inspections have affected the production of both lead and zinc [in China], and domestic miners have lowered their operation rates gradually ahead of the upcoming Lunar New Year holidays in mid-February , which has helped to support prices,” a Shanghai-based analyst said.

Other metals

  • The SHFE May tin contract price rose 50 yuan to 145,020 yuan per tonne.
  • The SHFE May nickel contract price dived 530 yuan to 97,280 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.08% to 90.48 as of 11.38am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down by 0.3% to $69.05 per barrel as of 11.38 am Shanghai time.
  • In equities, the Shanghai Composite was up by 0.07% to 3436.66 as of 11.30am Shanghai time.
  • In US data on Tuesday, Empire state manufacturing index in January disappointed with a reading of 17.7 reading – the market had expected a print of 18.5.
  • In Europe, the consumer price index for UK was flat with expectations at 3%, but down from December’s reading of 3.1%.
  • A slew of Chinese data including foreign direct investment, gross domestic product, industrial production, fixed asset investment and retail data are due on Thursday.
  • Data of note from the United States this week includes industrial production, building permits and unemployment claims.

SHFE snapshot at 11.31am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since previous session’s close (yuan)
Copper (March) 53,850 -450
Aluminium (March) 14,625 -120
Zinc (March) 26,105 40
Lead (March) 19,200 330
Tin  (May) 145,020 50
Nickel  (May) 97,280 -530

LME snapshot at 03.31am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since previous session’s close ($)
Copper 7,092 -14
Aluminium 2,213 -2
Lead 2,564 10
Zinc 3,400 -5
Tin 20,420 -50
Nickel 12,505 -40

Changjiang spot snapshot on January 17
  Range (yuan per tonne) Change (yuan)
Copper  53,690-53,730 -820
Aluminium 14,430-14,470 -260
Zinc 26,060-26,110 -100
Lead 19,000-19,200 -50
Tin  144,000-145,500 250
Nickel  96,950-97,350 -1,800