LIVE FUTURES REPORT 19/09: SHFE base metals strengthen; nickel bucks trend

Base metals prices on the Shanghai Futures Exchange (SHFE) were broadly higher during Asian morning trading hours on Tuesday September 19, with copper prices finding support from declining stocks.

The most-traded November copper contract on the SHFE traded at 50,840 yuan ($7,747) per tonne as of 03:13 BST, up 140 yuan from the previous day’s close, with over 110,000 lots of the contract having changed hands so far.

Red metal prices have staged a slight recovery this morning as the large stock increases seen last week came to a halt.

London Metal Exchange copper stocks declined a net 1,425 tonnes to 302,925 tonnes with 13,700 tonnes freshly cancelled on Monday. Meanwhile, SHFE copper stocks also decreased, dipping 1,058 tonnes to 64,078 tonnes.

“The rebound in copper prices is resultant from the decline in LME stocks following a sharp rise last week. In addition, prices should be supported by increased demand ahead of national holidays in China,” according to Citic Futures Research.

“Base metals were strong across the board as signs of increasing demand emerged and bargain hunters reappeared,” ANZ Research said on Tuesday.

“The corrections in the LME base metals appear to have run their course with the recent dips attracting buying… We have been on the lookout for base building and another buying opportunity, which may now be unfolding. We wait to see if follow-through buying emerges as the week progresses,” William Adams, Metal Bulletin’s senior analyst, said.

Weakened demand weighs on nickel prices

  • Nickel was the sole metal to trade in negative territory this morning.
  • The most-traded January nickel contract was little changed at 88,510 yuan per tonne, down just 20 yuan at the time of writing, but has continued to decline since.
  • “Demand for nickel is weakening. Stainless steel prices have retreated while stocks have been building up together with greater import volumes,” Citic Futures Research said.
  • Metal Bulletin’s assessment for benchmark 304 stainless cold rolled coil prices was at 16,400-16,900 yuan per tonne including VAT in the major market of Wuxi on September 14, down 300-400 yuan per tonne from a week earlier, as traders becoming more eager to offload their material amid inventory pressure.
  • “However, prices are likely to be supported by [increased] demand during the traditional consumption season [in China]. Furthermore, steel mills still hold a good profit margin,” Citic Futures Research added.

Other base metals higher

  • The SHFE November aluminium contract gained 160 yuan to 16,530 yuan per tonne.
  • The SHFE November zinc contract climbed 360 yuan to 25,525 yuan per tonne.
  • The SHFE November lead contract price rose 150 yuan to 19,980 yuan per tonne
  • The SHFE January tin contract price increased 630 yuan to 144,930 yuan per tonne.

Currency moves and data releases

  • The dollar index was down 0.01% at 91.97 as of 03:13 BST.
  • In other commodities, the Brent crude oil spot price rose 0.05% to $55.42 per barrel while the Texas light sweet crude oil spot price was down 0.04% to $49.90
  • In equities, the Shanghai Composite dip 0.06% to 3,360.78.
  • In US data on Monday, the NAHB housing market index came in at 64, a slight disappointment from the expected 67.
  • In Europe, the EU final CPI was recorded at 1.5% in August, level with forecasts, while final core CPI was also on par with forecasts at 1.2%.
  • The economic agenda is fairly light today with the EU’s current account and US data that includes building permits, current account, housing starts and monthly import prices of note.
LME snapshot at 0312 London time
Latest 3M LME Prices
Price ($/t) Change since yesterday’s close ($)
Copper 6,537.5 10.5
Aluminium 2,106 17
Lead 2,379.5 -10.5
Zinc 3,104.5 6.5
Tin 20,665 -35
Nickel 11,120 -115
SHFE snapshot at 0313 London time
Most traded SHFE contracts
Price (yuan/t) Change since yesterday’s close (yuan)
Copper 50,840 140
Aluminium 16,530 160
Zinc 25,525 360
Lead 19,980 150
Tin 144,930 630
Nickel 88,510 -20

Changjiang spot snapshot on September 19
Range (yuan/t) Change (yuan)
Copper 50,520—50,580 100
Aluminium 16,090—16,130 -80
Zinc 25,550—25,650 100
Lead 20,400—20,500 350
Tin 141,500—143,000 -750
Nickel 87,700—88,400 -550
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