LIVE FUTURES REPORT 20/10: SHFE aluminium prices supported by lower production data; copper up slightly

The most-traded December aluminium contract on the SHFE stood at 16,280 yuan ($2,458) per tonne as of 03:15 BST, up 130 yuan or 0.8% from the previous day’s close.

Light metal prices have found 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.

In addition, bargain hunting has emerged amid the general downtrend in aluminium prices seen since the beginning of October, leading to an uptick in buying interest.

“The aluminium price has been in a downward trend during October, so this has seen downstream users’ buying interest pick up,” China’s Galaxy Futures said.

Copper prices edge higher

• The most-traded December copper contract increased 40 yuan or 0.1% yuan to 54,660 yuan per tonne.
• The three-month copper price on the London Metal Exchange fell $23 to close at $6,967 per tonne on Thursday, while stocks declined a net 975 tonnes to 291,250 tonnes.
• 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.

Nickel, zinc prices rebound; others lower

• The SHFE January nickel contract price increased 830 yuan or 0.9% to 95,120 yuan per tonne.
• Premiums for 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.
• The SHFE December zinc contract price rose 185 yuan or 0.7% to 25,380 yuan per tonne.
• The SHFE December lead contract price eased 85 yuan or 0.4% to 19,115 yuan per tonne
• The SHFE January tin contract price edged down 140 yuan or 0.1% to 144,600 yuan per tonne.

Currency moves and data releases

• The dollar index was recently up by 0.34% at 93.49.
• In other commodities, the Brent crude oil spot price increased by 0.02% to $57.24 per barrel while the Texas light sweet crude oil spot price was up by 0.14% to $51.36.
• In equities, the Shanghai Composite was down by 0.03% to 3,369.04.
• 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.