LIVE FUTURES REPORT 21/12: SHFE copper extends gains on positive outlook

The copper price on the Shanghai Futures Exchange (SHFE) extended gains during Asian morning trading hours on Thursday December 21 on improved market sentiment.

The most-traded February copper contract on the SHFE stood at 54,210 yuan ($8,234) per tonne as of 10.09am Shanghai time, up 530 yuan from the previous session’s close.

The red metal’s price reached as high as 54,640 yuan per tonne, hitting its highest level since November 27.

Market sentiment has improved amid the recent rally in the copper price and long-term supply concerns as well as positive macro-economic data, and open interest increased 2,280 to 182,744 positions.

“The [copper price] rose strongly, adding to gains seen over the past week as sentiment continues to improve,” ANZ Research noted.

“Long-term supply concerns are driving tightening market conditions for copper as continued demand from power and construction are boosted by electro mobility,” analyst from SP Angel said.

On the demand side, pressure is being added by the looming ramp-up in copper demand driven by rising electric vehicle (EV) production.

“[The Clean Energy Ministerial] EV30@30 campaign has set the ambitious goal of a 30% market share for electric vehicles, significantly boosting demand for energy capture, storage and delivery infrastructure and associated raw materials,” SP Angel noted.

In a scenario where 100% of the world’s vehicles are electric, copper demand would be expected to increase 21% compared with current global demand, according to a report released by UBS in May. The report also expects the EV market to account for 13.7% of global car sales by 2025.

Positive US and Chinese data further strengthened market sentiment.

Overnight, US existing homes sales came at 5.81 million, beating both expected and previous readings.

“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,” ANZ Research said on Wednesday.

China’s Central Economic Work Conference to be held from next Monday will provide insights into the country’s economic agenda for next year. The conference will focus on ways to strengthen national supply-side reforms.

Copper stocks on the London Metal Exchange dipped 575 tonnes to 201,150 tonnes.

Tin and nickel track copper higher; aluminium, zinc, lead under pressure

  • The SHFE February aluminium contract price dipped 15 yuan to 14,670 yuan per tonne.
  • The SHFE February zinc contract price lost 80 yuan to 25,445 yuan per tonne.
  • The SHFE February lead contract price fell 260 yuan to 19,075 yuan per tonne
  • The SHFE January tin contract price rose 100 yuan to 138,090 yuan per tonne.
  • The SHFE May nickel contract price gained 560 yuan to 95,690 yuan per tonne.

Currency moves and data releases

  • The dollar index was up by 0.05% at 93.36 as of 10.09am Shanghai time.
  • In other commodities, the Brent crude oil spot price dipped 0.03% to $64.44 per barrel while the Texas light sweet crude oil spot price inched up 0.03% to $58.04.
  • In equities, the Shanghai Composite was up 0.03% to 3,288.75.
  • In data on Wednesday, China’s CB Leading Index in November gained 1.8%, above the previous mark of 1.3%. In the United States, existing homes sales topped estimates with a 5.81 million reading.
  • Today comes with a heavy US economic data schedule, including the latest GDP revision, the Chicago Fed National Activity Index and the Philadelphia Fed Manufacturing Index numbers, as well as the latest Personal Consumption Expenditures (PCE) prices.
  • In addition, EU flash consumer confidence numbers are due out later today.
LME snapshot at 0209 London time
Latest 3M  LME Prices
  Price ($/t)  Change since yesterday’s close ($)
Copper 7,037.5 -6.5
Aluminium 2,122 0
Lead 2,511 -14
Zinc 3,213.5 -4.5
Nickel 11,980 -60
SHFE snapshot at 1009 Shanghai time
Most traded SHFE contracts
  Price (yuan/t)  Change since yesterday’s close (yuan)
Copper  54,210 530
Aluminium 14,670 -15
Zinc 25,445 -80
Lead 19,075 -260
Tin  138,090 100
Nickel  95,690 560

Changjiang spot snapshot on December 21
  Range (yuan/t)  Change (yuan)
Copper  53,910 —53,930 550
Aluminium 14,270 — 14,310 -50
Zinc 25,570 —26,370 -70
Lead 19,050 —19,250 -200
Tin  138,500—139,500 500
Nickel  95,250 —95,550 600