LIVE FUTURES REPORT 25/04: SHFE aluminium prices recover on pickup in buying sentiment

Base metals prices on the Shanghai Futures Exchange were broadly higher during Asian morning trading on Wednesday April 25, after buying sentiment in China picked up following comments from the country’s central government which suggested a degree of flexibility in its monetary tightening policy.

Aluminium prices have recovered slightly following a two-day selloff sparked by the news that US would not be implementing secondary sanctions on Russian light metal producer Rusal, nor any of its subsidiaries.

The June aluminium contract price on the SHFE rebounded to 14,430 yuan ($2,286) per tonne as of 10.32 am Shanghai time, up by 0.3% or 45 yuan from Tuesday’s close.

Sentiment in China was buoyed by statements from a politburo meeting on Monday which suggested that country’s central government will adjust its policies to boost domestic demand and loosen its monetary policy. The politburo is a top decision-making body of the ruling Communist Party.

“Chinese buying sentiment strengthened… on further close reading of the politburo statements released on Monday. The market spotted the rarely used expression ‘expand domestic demand’ and significantly, the word ‘deleveraging’ was omitted from the politburo communique,” John Browning, managing director of Bands Financial said on Wednesday.

“This was the first politburo meeting since December 2014 to emphasize boosting domestic demand, a sign the government is prepared to fine-tune its policies to bolster growth as exports may face headwinds amid trade tensions and an uncertain economic outlook in the US,” Browning added.

The Shanghai Composite Index jumped 2% to 3,128.93 at the close on Tuesday, a recovery after Asian markets were dampened last week as the US and China squared up over trade tariffs.

Better-than-expected data from the United States overnight also provided support to the base metals complex.

US consumer confidence rebounded in April and new home sales increased more than expected in March, pointing to underlying strength in the country’s economy despite signs that growth had slowed in the first quarter of the year.

Base metals prices

  • The SHFE June copper contract price increased 120 yuan to 51,650 yuan per tonne.
  • The SHFE July nickel contract price rose 230 yuan to 103,560 yuan per tonne.
  • The SHFE September tin contract price increased 180 yuan to 146,470 yuan per tonne.
  • The SHFE June zinc contract price was flat at 24,430 yuan per tonne.
  • The SHFE June lead contract price was down 55 yuan to 18,310 yuan per tonne.

Currency moves and data releases

  • The dollar index was up 0.06% to 90.84 as of 11.19 am Shanghai time.
  • In other commodities, the Brent crude oil spot price decreased 0.17% to $73.73 per barrel, and the Texas light sweet crude oil spot price was down 0.31% to $67.62 as of 10.41 am Shanghai time.
  • In equities, the Shanghai Composite was down 0.4% to 3,116.38 as of 11.18 am Shanghai time.
  • In US data on Tuesday, consumer confidence rebounded to 128.7 in April, up from a downwardly revised 127 previously. New home sales in March came in stronger than expected, registering a reading of 694,000, which bested an expected print of 625,000.
  • It is a light day for data today, with mainly US weekly crude oil inventories of note.

LME snapshot at 03.30 am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since yesterday’s close ($)
Copper 6,977 -36
Aluminium 2,202 -25
Lead 2,327 17
Zinc 3,223.50 11.5
Tin 21,075 -25
Nickel 14,130 145
SHFE snapshot at 10.32 am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since yesterday’s close (yuan)
Copper (June) 51,650 120
Aluminium (June) 14,430 45
Zinc (June) 24,430 0
Lead (June) 18,310 -55
Tin  (July) 146,470 180
Nickel  (September) 103,560 230
Changjiang spot snapshot on April 25
  Range (yuan per tonne) Change (yuan)
Copper  51,720-51,740 80
Aluminium 14,420-14,460 -50
Zinc 24,740-25,740 -100
Lead 18,450-18,650 0
Tin  144,500-146,500 -250
Nickel  103,350-103,550 -550
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