LIVE FUTURES REPORT 18/06: LME base metals mostly down on strengthening dollar; SHFE closed due to public holiday in China

Three-month base metals prices on the London Metal Exchange were broadly down during Asian morning trading on Monday June 18, with a stronger dollar weighing on the complex.

The copper price at $6,994 per tonne as at 4.16am London time, is down $26 per tonne from last Friday’s close, with around 560 lots traded on Select so far.

Elsewhere in the complex, nickel also gave back some of the gains it achieved late last week, retreating back below the $15,300-per-tonne mark to stand at $15,120 per tonne at the time of writing.

Dollar strength seems to be the main reason behind the weakness witnessed across the LME base metals this morning.

The dollar index rose considerably last Friday, surpassing its previous 2018 high with a jump to 95.14 – its highest reading since early November last year. It has since retreated but remains in high ground at 94.86 as at 4.16am London time, compared with a reading of 93.55 at roughly the same time on June 14.

Adding further downside pressure to the base metals prices was an escalation in trade tensions between China and the United States, which has stirred up some risk aversion in the market.

“…the tit-for-tat tariffs that the US and China announced on [June 15] raised concerns that commodity demand would be materially impacted,” ANZ Research noted on Monday.

The US announced last Friday that it would impose tariffs on $50 billion of Chinese imports, including a wide range of China-made metal-making and mining machinery.

The Shanghai Futures Exchange is closed today for China’s Dragon Boat Festival holiday. The exchange will open reopen on Tuesday.

Base metals prices

  • The three-month copper price fell $26 per tonne to $6,994 per tonne.
  • Aluminium’s three-month price increased $8 per tonne to $2,212 per tonne.
  • The three-month nickel price plunged $55 per tonne to $15,130 per tonne.
  • Zinc’s three-month price edged down $5 per tonne to $3,075 per tonne.
  • The three-month lead price inched $2 per tonne lower to $2,403 per tonne.
  • Tin’s three-month price declined $35 per tonne to $20,765 per tonne.

Currency moves and data releases

  • The dollar index inched up 0.08% at 94.87 as of 4.17am London time.
  • In other commodities, the Brent crude oil spot price slumped 0.6% to $72.60 per barrel as of 11.17 am Shanghai.
  • The economic agenda is fairly light today with the Italian trade balance, German Bundesbank monthly report and the US’ NAHB housing market index.
  • In addition, US Federal Open Market Committee members Raphael Bostic and John Williams and European Central Bank President Mario Draghi are speaking.