LIVE FUTURES REPORT 26/04: SHFE zinc prices lead on the downside, pressured by large LME deliveries

Base metals prices on the Shanghai Futures Exchange were broadly down during Asian morning trading on Thursday April 26, with zinc prices leading the decline following a large delivery of the metal into London Metal Exchange sheds in Antwerp on Wednesday.

A 30,075-tonne delivery of zinc into LME-approved warehouses in Antwerp yesterday rattled price sentiment for the metal. The LME’s three-month zinc price closed down by 2.5% or $77 per tonne at $3,135 per tonne on Wednesday, with this weakness filtering through to prices on the SHFE.

The June zinc contract price on the SHFE traded at 23,710 yuan ($3,751) per tonne as of 10.14 am Shanghai time, down by 1.9% or 455 yuan per tonne from Wednesday’s close.

Positive backdrops continue to support a potential uptrend for zinc however, with Metal Bulletin’s Andy Farida suggesting it would be down to a slowly improving technical configuration and macroeconomic backdrop.

“We feel that the highly anticipated Chinese apparent demand after the Lunar New Year holiday could materialize in the second quarter and that may support the zinc price to rebound further,” Farida added.

Meanwhile, aluminium dipped on the back of further easing in Rusal sanction-related concerns.

The June aluminium contract price on the SHFE slid by 0.2% or 35 yuan per tonne to 14,370 yuan per tonne as of 10.14am Shanghai time.

“The volatility that has typified the [aluminium] market in recent weeks has abated. This has been helped by Monday’s decision from the US to ease sanctions on Rusal and news that Glencore has restarted aluminium purchases from the Russian company,” ANZ Research noted on Thursday.

Base metals prices

  • The SHFE June copper contract price increased 110 yuan to 51,660 yuan per tonne.
  • The SHFE July nickel contract price was down 190 yuan to 103,110 yuan per tonne.
  • The SHFE September tin contract price increased 840 yuan to 146,940 yuan per tonne.
  • The SHFE June lead contract price was down 30 yuan to 18,185 yuan per tonne.

Currency moves and data releases

  • The dollar index was down by 0.07% to 91.15 as of 10.14am Shanghai time.
  • In other commodities, the Brent crude oil spot price decreased by 0.48% to $74.40 per barrel, and the Texas light sweet crude oil spot price was down by 0.25% to $68.33 as of 10.14am Shanghai time.
  • In equities, the Shanghai Composite was down by 0.4% to 3,116.38 as of 11.18am Shanghai time.
  • In data on Wednesday, weekly crude oil inventories in the US rose by 2.2 million barrels over the past week, against an expected decline of 1.6 million barrels.
  • The economic agenda is fairly busy today with data including high street lending and CBI realized sales from the United Kingdom, a European Central Bank press conference and rate decision and US releases that include durable goods orders, unemployment claims, goods trade balance and preliminary wholesale inventories.
  • Looking to Friday, participants will likely be keeping a close eye on the advance reading of the US’ first-quarter gross domestic product (GDP) for a better understanding of the country’s underlying economic health.

LME snapshot at 04.10 am London time
Latest three-month LME Prices
  Price ($ per tonne)  Change since yesterday’s close ($)
Copper 6,975 -33
Aluminium 2,225 -20
Lead 2,317.50 11.5
Zinc 3,124.50 -10.5
Tin 21,215 -35
Nickel 14,065 -80
SHFE snapshot at 10.14 am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne)  Change since yesterday’s close (yuan)
Copper  51,660 110
Aluminium 14,370 -35
Zinc 23,710 -455
Lead 18,185 -30
Tin  146,940 840
Nickel  103,110 -190

Changjiang spot snapshot on April 26
  Range (yuan per tonne)  Change (yuan)
Copper  51,760-51,780 40
Aluminium 14,350—14,390 -70
Zinc 24,100—25,100 -640
Lead 18,350—18,550 -100
Tin  144,500—146,500 0
Nickel  103,400—103,700 100
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