LIVE FUTURES REPORT 19/08: SHFE base metals prices broadly down; Al up 0.5%

Base metals prices on the Shanghai Futures Exchange were mostly down during morning trading on Monday August 19 while markets reacted to comments from US President Donald Trump over the weekend that the United States is “doing very well with China and talking” but suggested he was not ready to sign a deal.

Aluminium was the lone metal in positive territory with a gain of 0.5%, while the rest were down between 0.1% for lead and 0.6% for zinc.

The most-traded October aluminium contact stood at 14,240 yuan ($2,022) per tonne as at 10.10am Shanghai time, up by 70 yuan per tonne from a close of 14,170 yuan per tonne on Friday.

The light metal has seemingly been buoyed by potential supply disruptions in China in the country’s province of Shandong following flooding caused by the Super Typhoon Lekima.

Declining exchange stock levels were also supportive to aluminium prices. Deliverable aluminium stocks at SHFE-listed warehouses totaled 387,663 tonnes on Friday, down by 3,804 tonnes from a week earlier and down from 423,068 tonnes at the end of June.

The other SHFE base metals drifted lower after weak economic data at the end of last week fueled concerns of slowing economic growth around the world and Trump’s suggestion that there would be no quick end to the US-China trade war dented investors’ appetite for risk.

Speaking to reporters in the US state of New Jersey on Sunday, Trump said, “I’m just not ready to make a deal yet. China would like to make a deal. I’m not ready.”

In US data on Friday, the University of Michigan’s preliminary reading of consumer sentiment fell to a seven-month low of 92.1 in August, below expectations of 97.2 and down from last month’s 98.4. Housing starts also disappointed at 1.19 million in July, below the forecast 1.26 million. But building permits – a proxy for future construction and thus metal usage – surprised to the upside at 1.34 million last month, up from 1.23 million in June.

Other highlights

  • The dollar index was down by 0.01% to 98.20 as at 10.10am Shanghai time.
  • It is a quiet day in terms of data on Monday, which is also likely causing the subdued movements in the SHFE base metals so far this morning.
  • The European Union’s current account and final consumer price index as well as Germany’s Bundesbank monthly report are of note today.
  • Highlights later this week include the minutes from the European Central Bank and US Federal Open Market Committee meetings as well as manufacturing data from across Europe and the US.