LIVE FUTURES REPORT 20/12: SHFE base metals complex higher; copper gains amid positive sentiment

Base metal prices on the Shanghai Futures Exchange were higher across the board during Asian morning trading on Wednesday December 20, with copper rising amid positive market sentiment.

The most-traded February copper contract on the SHFE was at 53,630 yuan ($8,114) per tonne as of 10.20am Shanghai time, up 240 yuan from Tuesday’s session close as investors opened long positions. Around 105,000 lots have been traded so far, with open interest at 181,062 positions at 10:05am Shanghai time, up from 175,622 positions at Tuesday’s close.

A positive macro backdrop should see commodity markets well supported today, ANZ Research said on Wednesday.

“In China, a People’s Bank of China survey showed the fourth quarter economy confidence index rose to 79.1%. This follows other macro data that paints a positive picture for base metals demand,” the bank added.

Also helping boost market sentiment was positive housing data out of the United States and the US tax reform bill being passed by the House of Representatives – the bill now heads to the Senate for passing, with market observers expecting this to happen within today.

Meanwhile, gains for the most-traded May nickel contract narrowed as consolidation set in after its surge since late last week. The contract was at 94,900 yuan per tonne as of 10:20am Shanghai time, up by 250 yuan from the previous session’s close, with around 445,000 lots traded so far. The contract had reached as high as 95,740 yuan on Monday, the highest since November 27.

Open interest of the contract was at 537,294 positions at 10:06am Shanghai time, up slightly from 530,108 positions at Tuesday’s close.

The London Metal Exchange three-month nickel price has also been climbing since early December, reaching as high as $11,850 on December 18, the highest since November 27.

“Although LME nickel is unlikely to retest its 2017 high by year-end, we think that the trajectory in the immediate term will be up, thanks to an overall positive sentiment across the industrial metals and a solid global risk appetite, in part driven by expectations of an imminent US tax reform and a global dovishness across the central banks due to disappointing inflation readings,” Boris Mikanikrezai, an analyst at Metal Bulletin Research, said.

Rest of complex higher

  • The SHFE February aluminium contract price rose 180 yuan to 14,660 yuan per tonne.
  • The SHFE February zinc contract price was up by 210 yuan to 25,495 yuan per tonne.
  • The SHFE February lead contract price increased 105 yuan to 19,340 yuan per tonne.
  • The SHFE January tin contract gained 420 yuan to 137,570 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.06% at 93.44 as of 10.17am Shanghai time.
  • In other commodities, the Brent crude oil spot price was up 0.03% to $63.87 per barrel as of 10:15am Shanghai time.
  • In equities, the Shanghai Composite was down 0.14% to 3,291.82.
  • In US data from Tuesday, building permits came in at 1.30 million, above the forecast of 1.27 million. Housing starts also came in at 1.30 million, while the current account balance stood at -$101 billion – both were higher than expectations.
  • Key economic data due later today includes the CB leading index for China, and existing home sales and crude oil inventories from the US.
  • 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 will provide insights into the country’s economic agenda for next year.
SHFE snapshot at 10:20am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since previous session’s close (yuan)
Copper (February) 53,630 240
Aluminium (February) 14,660 180
Zinc (February) 25,495 210
Lead (February) 19,340 105
Tin  (January) 137,570 420
Nickel  (May) 94,900 250

LME snapshot at 02:20am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since previous session’s close ($)
Copper 6,926.50 -15.5
Aluminium 2,093.50 -5.5
Lead 2,556.50 4.5
Zinc 3,189.50 11
Tin 19,350 -5
Nickel 11,795 40

Changjiang spot snapshot on December 20
  Range (yuan per tonne) Change (yuan)
Copper  53,360-53,380 0
Aluminium 14,320-14,360 150
Zinc 25,590-25,640 10
Lead 19,300-19,500 0
Tin  138,000-139,000 0
Nickel  94,650-94,950 -150