LIVE FUTURES REPORT 17/12: SHFE base metals prices broadly up on trade positivity; Ni jumps 1.2%

Base metals prices on the Shanghai Futures Exchange were mostly up during the morning trading session on Tuesday December 17, with the complex reacting to the positive news surrounding a trade deal between China and the United States.

With the exception of tin that was little changed and lead that dipped by 0.3%, the SHFE base metals were all up from their Monday closes this morning.

Nickel was the best performer of the complex, with its most-traded February contract rising to 111,990 yuan ($15,998) per tonne as at 11.30am Shanghai time, up 1,270 yuan per tonne – or 1.2% – from Friday’s close of 110,720 yuan per tonne.

“Nickel prices benefited from the overall improvement in the global macroeconomic environment with China and the US coming close to a deal [but] the current bullishness [inspired by the] economic backdrop runs counter to nickel’s poor fundamentals amid muted demand for stainless steel. We therefore would adopt a cautious attitude toward the recent price rise,” an analyst at Yinhe Futures told Fastmarkets.

But a raft of weaker-than-expected manufacturing purchasing managers’ index (PMI) data out across Europe on Monday has put a lid on any meaningful gains in the SHFE base metals.

Germany’s flash manufacturing PMI slipped to 43.4 in December from 44.1 previously, while France’s fell to 50.3 from 51.7. The European Union’s reading dropped to 45.9 from an upwardly revised 46.9 and the United Kingdom’s print slid to 47.4 from 48.9.

Meanwhile, tin shrugged off the positive influence of an improving macroeconomic backdrop, with most-traded January contract on the SHFE sliding to 140,640 yuan per tonne as at 11.30am Shanghai time, down by just 60 yuan per tonne from Monday’s close.

“There’s no change in tin’s supply and demand fundamentals, which are both weak. The low tin price nowadays may prompt producers to cut production which may cap the downswing in prices,” the analyst with Jinrui Futures noted.

Other highlights

  • The dollar index was down by 0.08% at 97.09 as at 11.30am Shanghai time, little changed from a reading of 97.07 at a similar time on Monday.
  • It is a busy day for data with highlights that include UK employment figures and CBI industrial order expectations as well as US building permits, housing starts, capacity utilization and industrial production.