LIVE FUTURES REPORT 21/08: SHFE base metals prices broadly up; tin, lead weaken

Base metals prices on the Shanghai Futures Exchange were broadly up during morning trading on Tuesday August 21, with a retreat in the dollar continuing to provide support to the complex.

The dollar index, at 95.56 as at 10.25am Shanghai time, continues to drift lower after reaching a peak of 96.99 on August 15.

Comments from US President Donald Trump in which he all expressed his disappointment with the US Federal Reserve for raising interest rates helped push the currency lower overnight.

“President Trump allegedly voiced concern over rising US interest rates, stating he had expected Fed chair [Jerome] Powell to be a cheap-money chairman,” analysts with ANZ Research noted on Tuesday.

“While President Trump’s displeasure at rising interest rates is nothing new, and the Fed maintains full operational independence, markets remain attentive to such comments,” they added.

The weaker dollar provided some support to the SHFE base metals this morning with copper, aluminium and zinc ticking higher, while nickel was little changed with a slight upward bias.

Aluminium led on the upside, tracking a relatively robust performance by the three-month aluminium contract on the London Metal Exchange on Monday.

The SHFE’s most-traded October aluminium contract traded at 14,670 yuan ($2,139) per tonne as at 10.26 am Shanghai time, up by 215 yuan per tonne or 1.5% from Monday’s close.

“The higher [aluminium] price on the LME helped dragged Chinese domestic futures prices upward following a strong performance overnight,” a Shanghai-based analyst told Metal Bulletin.

Elevated alumina prices of late have also shored up primary aluminium prices; Metal Bulletin’s benchmark daily fob Australia alumina index climbed 5.4% to $566.29 per tonne on Monday from $537.08 per tonne on August 17 due to increased tightness in the spot market.

Meanwhile, lead and tin bucked the generally firmer tone this morning, with both metals’ prices falling.

Base metals prices

  • The SHFE October copper contract moved up 150 yuan per tonne to 48,400 yuan per tonne.
  • The SHFE October zinc contract increased 80 yuan per tonne to 20,185 yuan per tonne.
  • The SHFE October lead contract dipped 70 yuan per tonne to 17,460 yuan per tonne
  • The SHFE January tin contract slipped 1,910 yuan per tonne to 143,210 yuan per tonne.
  • The SHFE November nickel contract edged up 60 yuan per tonne to 112,170 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.16% at 95.56 as at 10.25am Shanghai time.
  • In other commodities, Brent crude oil was down 0.03% at $72.09 per barrel as at 10.25 am Shanghai time.
  • In equities, the Shanghai Composite soared 1.43 % to 2737.13 as at 11.46 am Shanghai time.
  • There was no major data released on Monday.
  • Today’s economic agenda is similarly light with the United Kingdom’s public sector net borrowing and CBI industrial order expectations of note.