LIVE FUTURES REPORT 25/02: Selling pressure cools with LME nickel price climbing 1.7%; tin gains 1.1%

The three-month nickel price on the London Metal Exchange outperformed its peers across morning trading on Tuesday February 25, with all base metals trading in positive territory, while complex-wide selling pressure that emerged on Monday afternoon continued to ease.

Nickel’s outright price on the LME was recently seen at $12,640 per tonne on Tuesday morning, up from Monday’s closing price on $12,430 per tonne, while turnover was moderate at just over 3,700 lots exchanged as at 9.10am London time.

Yet with global coronavirus fears easing into Tuesday morning, Asian buying saw most base metals recover losses made at Monday’s close, with LME nickel climbing to an intra-morning high of $12,765 per tonne at 8.34am London time.

This comes against yet another fresh inflow of LME-registered nickel into exchange warehouses, with some 1,332 tonnes delivered across Kaohsiung and Singapore this morning.

Total on-warrant nickel stocks now sit at 146,844 tonnes, up from just 43,700 tonnes at the start of December 2019. Meanwhile, nickel’s cash/three-month spread remains in the widest contango across the complex, recently seen at $86.50 per tonne.

“Yesterday was strange to put it mildly; the global markets in general were obviously becoming unnerved by the coronavirus getting a foothold outside of China, with Italy probably the most concerning development,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning note on Tuesday.

“Metals prices this morning have all recovered a little, but in light volume, and it feels certainly like it is just short-covering by speculative traders,” he added.

Elsewhere in the complex, the three-month tin price was also higher over the morning, climbing by just over 1% to recently trade at $16,655 per tonne. Turnover in tin was high over the morning with some 242 lots exchanged as at 9.25am London time.

Despite upward price action, many participants dealing in tin are continuing to question a large inflow of some 1,000 tonnes into LME-registered warehouses in Los Angeles last week, with some suggesting the material could be of Indonesian-origin.

Total LME tin stocks now sit at 7,345 tonnes, with some 6,225 tonnes on warrant.

Yet forward spreads in LME tin remain in contango, with the metal’s cash/three-month spread recently trading in a $13-per-tonne contango.

Other highlights

  • In other commodities, Brent crude oil futures were trading 0.34% higher at $55.73 per barrel.
  • In data from the European Union this morning, Germany’s final gross domestic product (GDP) growth on a quarter-on-quarter basis for the final quarter of 2019 was in line with expectations at 0.0%.
  • Later, the United States will release its Conference Board consumer confidence index along with its Richmond Manufacturing Index.