LIVE FUTURES REPORT 22/02: SHFE copper prices pressured by weak manufacturing data; others broadly up

The base metals continue to benefit from lingering optimism over progress made in the trade talks between China and the United States, but a string of weak manufacturing data released on Thursday caused copper’s recent run of strength to come to an end.

The SHFE’s most-traded April copper contract stood at 49,620 yuan ($7,332) per tonne as at 10.45am Shanghai time, down by 0.1% or 50 yuan per tonne from Thursday’s close.

“Copper prices fell… after disappointing factory data in the US and Europe. German manufacturing suffered its steepest decline in export orders in more than six years in February,” Daniel Been, head of foreign exchange research at Australia and New Zealand Banking Group (ANZ), said in a morning note.

In European data released on Thursday, the European Union’s flash manufacturing purchasing managers’ index (PMI) hit its lowest level in almost six years in February with a reading of 49.2 – below the crucial 50 level that separates expansion in activity from a contraction and down from a previous reading of 50.2

“However, sentiment in the sector remained positive, with further progress in trade talks helping push most other metals higher,” ANZ’s Been added.

This lingering optimism over trade was sufficient to boost the rest of the SHFE base metals, barring tin, higher on Friday morning. Tin bucked the firmer tone with its most-traded May contract sliding 0.4%.

Base metals prices

• The SHFE April zinc contract price rose by 110 yuan per tonne to 21,560 yuan per tonne.
• The SHFE May nickel contract price edged up by 50 yuan per tonne to 101,030 yuan per tonne.
• The SHFE April aluminium contract climbed by 65 yuan per tonne to 13,620 yuan per tonne.
• The SHFE April lead contract price was up by 135 yuan per tonne to 16,900 yuan per tonne.
• The SHFE May tin contract price fell by 630 yuan per tonne to 149,920 yuan per tonne.

Currency moves and data releases

• The dollar index was stable at 96.61 as at 11.47am Shanghai time.
• In equities, the Shanghai Composite was up by 0.03% to 2,752.73 as at 11.30am Shanghai time.
• In EU data on Thursday, the French flash services PMI for February was recorded at 49.8, up from 47.8 last month and beating the expected figure of 48.6. The country’s flash manufacturing PMI was also better at 51.4, up from 51.2 last month.
• In Germany, flash services PMI for the same period was improved at 55.1, up from 53 previously and beating an expected drop to 52.8. Flash manufacturing PMI over the same period was worse at 47.6, down from 49.7 last month.
• The EU’s flash services PMI for January-February improved to 52.3, from 51.2 previously, while flash manufacturing PMI was worse at 49.2, down from 50.5 previously.
• In US data on Thursday, the February manufacturing PMI fell from 54.9 to 53.7. The January leading index fell 0.1% month on month, leaving the three-month average at 0.0% (down from 0.8% month on month this time last year) – pointing to deceleration in activity six months ahead.
• The Philadelphia Federal Reserve Index fell to -4.1 in February from 17 previously.
• US weekly unemployment claims totaled 216,000, below the estimate of 228,000. Existing home sales disappointed with a 4.94 million reading.
• In data on Friday, German final gross domestic product (GDP) and Ifo business climate, EU final and core consumer price index (CPI), the UK’s Confederation of British Industry (CBI) realized sales, China’s Conference Board leading index and the US Federal Reserve’s monetary policy report are due.
• In addition, European Central Bank Mario Draghi and US Federal Open Market Committee members John Williams, Richard Clarida, James Bullard and Randal Quarles are speaking.