LIVE FUTURES REPORT 18/10: SHFE tin price outperforms while others drift upward; nickel flat

Base metals prices on the Shanghai Futures Exchange were broadly up during the morning trading session on Friday October 18, after a possible Brexit deal and moderately bullish headlines on United States-China trade talks helped boost sentiment.

Tin gave the best performance of the complex in terms of percentage gains, with market participants continuing to digest the news that China’s Yunnan Tin Co (YTC) will cease all smelting operations at its Ausmet plant for approximately 50 days for scheduled maintenance.

The stoppage at the Ausmet operation, located in the southwestern Chinese province of Yunnan, is expected to begin on October 21. YTC is the world’s largest tin smelter and produced 78,000 tonnes of refined tin in 2018.

“Tin prices have staged a modest rally from recent lows in response to news of production cuts. Demand concerns continue to overhang, although there remains the risk of short-covering gains in the short term because speculative positioning remains extremely polarized,” Fastmarkets analyst James Moore said.

The most-traded January tin contract on the SHFE rose to 140,400 yuan ($19,816) per tonne as at 10.16am Shanghai time, up by 1,140 yuan per tonne – or 0.8% – from Thursday’s close of 139,260 yuan per tonne.

With the exception of nickel, the other SHFE base metals registered gains this morning, ranged between a 0.3% gain in the December aluminium contract and a slight 20 yuan per tonne rise in the December copper contract to 46,670 yuan per tonne.

Nickel, giving the worst performance of the complex, was broadly flat with a slight downward bias. The metal’s most-traded December contract stood at 128,730 yuan per tonne as at 10.16am Shanghai time, down 20 yuan per tonne – or 0.02% – from Thursday’s close of 128,750 yuan per tonne.

Other highlights

  • In copper news, China’s major copper smelters have raised the fourth-quarter treatment and refining charges (TC/RCs) price floor by 20% from the prior quarter to $66 per tonne/6.6 cents per lb.
  • The dollar index, which gauges the strength of the US currency against a basket of foreign currencies, was up by 0.03% at 97.62 as at 10.58am Shanghai time.
  • In Chinese data on Friday, the country’s economy grew by 6.0% year on year in the third quarter of this year, slowing from the 6.2% growth recorded in the second quarter, according to data from the National Bureau of Statistics.
  • Chinese retail sales increased by 7.8% year on year in September, up from the 7.5% gain in the prior month. Industrial production figures were better than expected with a year-on-year gain of 5.8% last month compared with the 5.0% increase that analysts had forecast and up from the 4.4% rise recorded in August.
  • China’s fixed-asset investment expanded by 5.4% during the January-September period, compared with 5.5% in the first eight months. Real estate investment growth in the first nine months rose by 10.5%, the same as in the first eight months.
  • Data out later on Friday includes the European Union’s current account and US leading indicators.
  • Day two of the EU economic summit gets underway on Friday, while there are International Monetary Fund meetings scheduled throughout the day, too.