LIVE FUTURES REPORT 20/10: LME nickel price rallies over $400/t; copper back above $7,000/t

The three-month nickel price is currently trading $465 per tonne higher – more than 4% higher than Thursday’s 5pm close price.

“Nickel broke through the recent $12,000 mark and volumes have been exceptional with 3,800 lots trading by 8am, up by 128% on the 20-day average, benefiting from the move in ferrous,” Marex Spectron said.

The higher exchange price is pushing physical premiums higher too. Nickel briquettes cif China have followed the recent upsurge in nickel full plate premiums, driven by a free trade agreement between Australia and China as well as stronger briquettes demand from the battery sector.

Aluminium prices climbed $43 per tonne, finding support from the news that China’s capacity cuts in the domestic aluminium sector are beginning to take effect.

“Chinese aluminium production continued to fall as the impact of upcoming closures accelerated,” ANZ Research said on Friday.

Chinese aluminium output fell for the third consecutive month in September, with the country producing 2.61 million tonnes of electrolytic aluminium last month, marking a year-on-year decrease of 5.6% and a 1.1% fall month on month compared with 2.64 million tonnes in August.

Copper has also broken higher, climbing back above $7,000 per tonne after falling at the close three days in a row.

“The pullback in the metals prices appears to have run its course for now with most of the LME metals putting in some strong gains this morning, with three-month copper prices back above $7,000 per tonne,” said William Adams, Metal Bulletin senior analyst.

“We have said in recent days we were on the lookout for signs about how strong underlying bullish sentiment is and today’s upbeat tone suggests sentiment remains bullish,” he added.

Tin was the only base metal to buck the trend, falling below $20,000 per tonne as stocks remain unchanged for the second day in a row.

Copper bounces higher

• The three-month copper price was up $55 to $7,022 per tonne.
• Stocks declined a net 3,625 tonnes to 287,625 tonnes. 8,200 tonnes of copper was freshly cancelled with the majority in New Orleans.
• The threat of US trade tariffs has improved the arbitrage ratio between the LME and Comex while the likelihood of increased infrastructure spending during Donald Trump’s presidency has raised expectations of greater demand from the region, encouraging the flow of copper from the LME system to Comex, Shairaz Ahmed told delegates at the 2017 China Copper conference in Jiangxi Nanchang on October 19.

Base metals prices

• The three-month aluminium price was $43 higher at $2,162 per tonne. Stocks dipped 5,575 tonnes to 1,202,225 tonnes.
• Nickel’s three-month price was up $465 tonnes to $12,100 per tonne. Inventories were up 1,524 tonnes to 387,943 tonnes.
• The three-month zinc price was up $43 to $3,160 per tonne. Stocks declined 775 tonnes to 268,950 tonnes.
• Lead’s three-month price edged $9.50 to $2,523 per tonne. Inventories dipped 1,775 tonnes to 150,075 tonnes, with 9,300 tonnes freshly cancelled.
• The three-month tin price was $55 lower at $19,950 per tonne. Stocks were unchanged at 2,110 tonnes.

Currency moves and data releases

• The dollar index was recently up by 0.42% to 93.56.
• In other commodities, the Brent crude oil spot price dipped by 0.78% to $56.80 per barrel.
• In US data on Thursday, weekly unemployment claims at 222,000 were below the forecast of 245,000 while the Philly Fed manufacturing index in October was 27.9, beating the previous figure of 23.8.
• The economic agenda is fairly light today with German producer prices, EU current account, UK public sector net borrowing and US data that includes existing home sales and the Federal budget balance of note.