LIVE FUTURES REPORT 19/12: SHFE base metals diverge; nickel continues to rise

Base metal prices on the Shanghai Futures Exchange took divergent paths during Asian morning trading on Tuesday December 19, with nickel continuing to rise as investors opened long positions.

The most-traded May nickel contract on the SHFE was at 94,730 yuan ($14,319) per tonne as of 10:44am Shanghai time, up by 990 yuan from the previous session’s close, with around 662,000 lots traded so far. The contract reached as high as 95,740 yuan during the day, the highest since November 27.

Open interest of the contract was at 547,484 positions at 10:15am Shanghai time, up from 533,474 positions at Monday’s close.

The restart of stock replenishing in the stainless steel market and already low spot stainless steel inventory levels will continue to drive the profitability of stainless steel mills which will in turn help increase nickel prices, China’s Galaxy Futures said late on Monday. The broker suggested clients go long on SHFE nickel upon price corrections.

Meanwhile, the most-traded February copper contract on the SHFE was at 53,520 yuan per tonne as of 10.44am Shanghai time, down 40 yuan from Monday’s session close amid profit-taking and short-selling pressure. Around 127,000 lots were traded so far, with open interest at 179,066 positions at 10:15am Shanghai time, up from 174,016 positions at Monday’s close.

“In the short term, the rise in copper prices will likely increase scrap copper supply, and when combined with a sluggish physical market and slow stock replenishing at year-end, the SHFE copper price could face downward pressure,” China’s Minmetals Jingyi Futures said in a report on Monday.

Rest of complex diverge

  • The SHFE February aluminium contract price fell 35 yuan to 14,480 yuan per tonne.
  • The SHFE February zinc contract price slipped 180 yuan to 25,435 yuan per tonne.
  • The SHFE February lead contract price increased 95 yuan to 19,390 yuan per tonne.
  • The SHFE January tin contract gained 210 yuan to 137,630 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.02% at 93.69 as of 10.44am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down 0.03% to $63.36 per barrel as of 10:43am Shanghai time.
  •  In equities, the Shanghai Composite was up 0.47% to 3,283.30.
  •  In data from Monday, the EU final CPI and final core CPI for November came in at 1.5% and 0.9% respectively – both in line with expectations. The US NAHB housing market index rose to 74, above forecast of 70 – a reading above 50 indicates a favorable outlook on home sales.
  •  Key economic data due later today include German Ifo business climate and US building permits, current account and housing starts.
  •  The market will also look to news coming from China’s Central Economic Work Conference, which kicked off on Monday. Conclusions from the closed meetings ill provide insights into China’s economic agenda for next year.
SHFE snapshot at 10:44am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since previous session’s close (yuan)
Copper (February) 53,520 -40
Aluminium (February) 14,480 -35
Zinc (February) 25,435 -180
Lead (February) 19,390 95
Tin  (January) 137,630 210
Nickel  (May) 94,730 990

LME snapshot at 02:44am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since previous session’s close ($)
Copper 6,886 -19
Aluminium 2,062 -1
Lead 2,550.50 -10.5
Zinc 3,189.50 -6.5
Tin 19,250 -100
Nickel 11,740 -90

Changjiang spot snapshot on December 19
  Range (yuan per tonne) Change (yuan)
Copper  53,360-53,380 0
Aluminium 14,170-14,210 10
Zinc 25,580-25,630 -60
Lead 19,300-19,500 50
Tin  138,000-139,000 1,250
Nickel  94,750-95,150 1,000