LIVE FUTURES REPORT 19/06: Trade war fears, firm dollar sink SHFE base metals prices; copper leads on downside

Base metals prices on the Shanghai Futures Exchange were all down during Asian morning trading on Tuesday June 19, with concerns of a full-blown trade war between the United States and China denting market sentiment and inducing a wave of selling across the complex.

Copper prices were the most affected with the most-traded August copper contract on the SHFE plunging 2.4% or 1,270 yuan ($198) per tonne to 52,390 yuan per tonne as at 11.37am Shanghai time on Tuesday, compared with last Friday’s close.

The SHFE was closed on Monday due to the Dragon Boat Festival holiday in China.

The weaker tone across the base metals is unsurprising given the recent flare up in trade tensions between the US and China, with the prospect of further tariffs between the two raising concerns that economic growth could be affected, according to ANZ Research.

In addition, a firm dollar continues to weigh on the complex.

Despite retreating from a fresh 2018 high of 95.14 on June 15, the dollar index remains in relative high ground at 94.59 as at 12.09pm Shanghai time on Tuesday.

Furthermore, supply-side concerns are also applying downward pressure to red metal prices, with the recent closure of Vedanta Resources’ Sterlite Tuticorin smelter in India said to affect some 230,000 tonnes of copper concentrates consumption.

Base metals prices

  • The SHFE August aluminium contract dipped 100 yuan per tonne to 14,310 yuan per tonne.
  • The SHFE July lead contract price declined 150 yuan per tonne to 20,060 yuan per tonne.
  • The SHFE September tin contract price decreased 2,050 yuan per tonne to 145,290 yuan per tonne.
  • The SHFE September nickel contract price fell 1,440 yuan per tonne to 114,330 yuan per tonne.
  • The SHFE August zinc contract slumped 550 yuan per tonne to 23,545 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.18% at 94.59 as at 12.09pm Shanghai time. This is down from its recent peak of 95.14 on June 15 – its highest since early November last year.
  • In other commodities, the Brent crude oil spot price slumped 0.81% to $74.83 per barrel as at 11.37 am Shanghai.
  • In equities, the Shanghai Composite slumped 2.97% to 2,932.08 as at 12.05pm Shanghai time.
  • In data today, we have the European Union’s current account as well as building permits and housing starts from the United States of note.
  • In addition, European Central Bank (ECB) President Mario Draghi is speaking at the ECB Forum on Central Banking in Sintra, Portugal.