LIVE FUTURES REPORT 25/11: Broadly positive start to week for SHFE base metals prices; Ni climbs 1.9%

Base metals prices on the Shanghai Futures Exchange were mostly up during the morning trading session on Monday November 25, with fresh hopes for a trade deal between China and the United States and firm US manufacturing data supporting the complex.

Continuing positive trade vibes between the world’s two largest economies continued to support risk sentiment this morning.

“Base metal prices pushed higher after progress in the trade talks. US President Trump said the parties are very close to a trade deal. This follows a Bloomberg article suggesting the new tariffs scheduled for December will be postponed, even if there is no deal by then,” ANZ Research analyst Felicity Emmett said in a morning note.

“Adding to the positive tone this morning [were suggestions] that China is willing to make some commitments on the trade deal structural issues, especially around intellectual property concerns,” Stephen Innes, Asia Pacific market strategist at AxiTrader, said.

“In guidelines issued on Sunday, [China’s State Council and the Communist Party’s Central Office] said it would raise penalties on violations of intellectual property rights to address one of the sticking points in trade talks with the US,” Innes added.

Additionally, positive data out of the US at the end of last week has also seen sentiment pick up this morning.

In data on Friday, the US’ manufacturing purchasing managers’ index (PMI) rose to 52.2 in November, up from 51.3 in October and reaching a seven-month high. The services PMI was similarly better than expected at 51.6, up from 50.6 last month and now at its highest level in the past four months.

This helped offset the more mixed readings coming out of Europe – see data section below.

As a result, the SHFE base metals were broadly up during the morning trading session on Monday, with nickel leading the charge.

The most-traded February nickel contract climbed to 115,350 yuan ($16,385) per tonne as at 10.27am Shanghai time, up by 2,150 yuan per tonne – or 1.9% – from Friday’s close of 113,200 yuan per tonne.

Nickel’s outperformance follows similar strength on the London Metal Exchange on Friday, when the metal’s three-month price closed up by 1% at $14,635 per tonne.

In the rest of the complex, January copper rose by 280 yuan per tonne – or 0.6% – to 47,150 yuan per tonne, January zinc gained 115 yuan per tonne – or 0.6% – to 18,085 yuan per tonne while January lead edged up by 55 yuan per tonne – or 0.4% – to 15,575 yuan per tonne.

The others fell marginally: January aluminium was little changed – down by just 5 yuan per tonne or to 13,850 yuan per tonne and January tin fell by 250 yuan per tonne – or 0.2% – to 138,800 yuan per tonne.

Other highlights

  • The dollar index, which gauges the strength of the US currency against a basket of foreign currencies, was little changed at 98.25 as at 10.27am Shanghai time.
  • The Shanghai Composite index was up by 0.4% at 2,895.48 as at 11.30am Shanghai time.
  • European data released last Friday was mixed; France’s flash manufacturing and services PMIs stood at 51.6 (versus the expected 50.9) and 52.9 (versus the expected 53) respectively in October. Germany’s flash manufacturing and services PMIs for the same month were 43.8 (versus the expected 42.9) and 51.3 (versus the expected 52) respectively.
  • The United Kingdom’s flash manufacturing and services PMIs were decidedly weak, coming in at 48.3 (versus the expected 48.8) and 48.6 (versus the expected 50.1) respectively.
  • The European Union’s flash manufacturing PMI was above expectations at 46.6, while the services PMI was below analysts’ forecasts at 51.5.
  • In other US data on Friday, the University of Michigan’s revised consumer sentiment was at 96.8, above the expected 95.8, while inflation expectations were at 2.5%, flat with the prior month.
  • The economic agenda is light today with the German Ifo Business Climate index and China’s Conference Board leading index due.