LIVE FUTURES REPORT 24/10: LME nickel price climbs 1% while spreads widen; zinc moves higher

The three-month nickel price on the London Metal Exchange was higher during morning trading on Thursday October 24, climbing just under 1% amid moderate turnover, while a similar uptick in zinc saw the galvanizing metal close in on nearby resistance levels.

Nickel’s futures price was recently seen at $16,775 per tonne, while just under 2,500 lots were exchanged as of 9:45am London time.

Supporting buying momentum, nickel’s forward spreads on the LME remain in positive territory, with the benchmark cash/three-month spread now indicating a contango of $29.50 per tonne, while the nearby cash/November spread was also trading in a $27.50-per-tonne contango.

Nickel’s tomorrow/next-day spread – which reflects the cost of borrowing nickel positions overnight – was also seen in a contango of $5.50 per tonne this morning.

Meanwhile, more than a decade low in LME nickel stocks has similarly bolstered price action, with on-warrant material now at just 30,186 tonnes.

Market participants are now uncertain of LME nickel’s direction after the LME said it was monitoring whether spreads are an accurate reflection of market fundamentals.

Meanwhile, the three-month zinc price was also higher over the morning period, continuing its approach toward the $2,500 per tonne level, but recently trading just below the mark at $2,496 per tonne.

Turnover was high in zinc over the morning, with some 3,300 lots exchanged as of 10am London time.

But despite upward price action, zinc’s forward spreads on the LME remain unfavorable for spot business, with the metal’s benchmark cash/three-month spread recently trading in a $36 per tonne backwardation.

Other highlights:

  • The US dollar index was higher over the morning, up by 0.01% at 97.47.
  • In other commodities, Brent crude oil futures were recently trading lower, down by 0.33% at $60.88 per barrel.
  • In a host of manufacturing data from the EU data, German flash manufacturing PMI figures for the October period were recorded at 41.9, missing an expected level of 42 and keeping in contraction territory.
  • Additionally, German flash services PMI for October also fell below expectations at 51.2, but remained indicative of expansion in the region’s manufacturing sector.
  • Equally, the EU’s flash manufacturing PMI number over the same period fell to 45.7, while the EU flash services PMI number for October improved to 51.8.
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