LIVE FUTURES REPORT 17/04: SHFE base metals mostly up; aluminium leads the pack higher

Base metals prices on the Shanghai Futures Exchange were mostly up during Asian morning trading on Tuesday April 17, partially buoyed by positive Chinese economic data. Meanwhile, the fallout surrounding the sanctions imposed by the United States on Russian aluminium producer UC Rusal continue to drive prices for the light metal higher.

The most-traded June aluminum contract on the SHFE traded at 14,840 yuan ($2,362) per tonne as of 11.19am Shanghai time, up 218 yuan per tonne from Monday’s close.

Concerns of supply tightness stemming from the US sanctions placed on Rusal continue to dominate the aluminium market, with the strong sentiment for the light metal filtering through to the rest of the complex.

“We think the sanctions are a potential game changer for aluminium, given that Rusal supplies close to 700,000 tonnes of metal into the US market (14% of overall US imports) and accounts for 7% of global supply (at roughly 4.5 million tonnes),” Edward Meir, independent commodity consultant at INTL FCStone said on Monday.

“Aluminium prices surged as concerned emerged that UC Rusal may have to cut production as markets become increasingly off limits to their production. With Europe and the US consumer reluctant to take its metals, it appears alternative markets in the Middle East, Turkey and China are the only ones remaining open,” ANZ Research noted on Tuesday.

“The fallout to [London Metal Exchange’s] decision to stop accepting Russian material continues to play out, with traders frantically dumping metal into warehouses before the deadline,” it added.

Meanwhile, generally positive economic data out of China this morning provided further support to the base metals – see data section below.

Base metals prices

  • The SHFE June copper contract rose 450 yuan to 50,940 yuan per tonne.
  • The SHFE June lead contract price increased 90 yuan to 18,190 yuan per tonne.
  • The SHFE May tin contract price climbed 890 yuan to 144,970 yuan per tonne.
  • The SHFE July nickel contract price fell 570 yuan to 103,780 yuan per tonne.
  • The SHFE June zinc contract price was up 45 yuan to 23,735 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.08% at 89.73 as of 11.23am Shanghai time.
  • In other commodities, the Brent crude oil spot price inched up 0.11% to $71.64 per barrel as of 11.49 am Shanghai.
  • In equities, the Shanghai Composite edged down 0.35% to 3,099.90 as of 11.50am Shanghai time.
  • In US data on Monday, the Empire State Manufacturing Index for April stood at 15.8, firmly in positive territory but down from 22.5 in March. Headline retail sales grew by 0.6% in March, beating an expected increase of 0.4%, meanwhile the core reading was in line with expectations with a gain of 0.2%.
  • The economic agenda is fairly busy today with data out already showing China’s economy grew by 6.8% in the first quarter of 2018 from a year earlier, topping the forecast 6.7% increase. The country’s fixed asset investment climbed 7.5% in January-March, which was broadly in line with expectations, while retail sales increased by 10.1% year on year in March against forecast growth of 9.7%. Chinese industrial production disappointed, however, with growth of 6% last month, falling short of an expected 6.3% increase.
  • Later, we have key employment data from the United Kingdom including the average earnings index, claimant count and unemployment rate. Data of note from the United States includes building permits, housing starts, capacity utilization rate, and industrial production.
  • In addition, US Federal Open Market Committee members John Williams, Randal Quarles and Raphael Bostic are speaking.

LME snapshot at 4.20am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since previous session’s close ($)
Copper 6,899 -12
Aluminium 2,390 -9.5
Lead 2,354 -16
Zinc 3,148 11.5
Tin 21,155 130
Nickel 14,245 -90

SHFE snapshot at 11.20am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since previous session’s close (yuan)
Copper (June) 50,940 450
Aluminium (June) 14,840 215
Zinc (June) 23,735 45
Lead (June) 18,190 90
Tin  (May) 144,970 890
Nickel  (July) 103,780 -570

Changjiang spot snapshot on April 17
  Range (yuan per tonne) Change (yuan)
Copper  50,930-50,950 -480
Aluminium 14,710-14,750 -280
Zinc 24,100-25,100 -260
Lead 18,300-18,500 -100
Tin  144,000-145,5500 -750
Nickel  103,500-103,800 -100
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