LIVE FUTURES REPORT 26/06: Trade tensions unnerve markets, most SHFE base metals prices fall

Nickel led the complex lower with the most-traded September contract falling to 114,890 yuan ($17,661) per tonne as at 11.30am Shanghai time, down by 1,780 yuan per tonne or 1.5% from Monday’s close.

The weakness in SHFE nickel prices this morning follows a 3.6% slump in the three-month London Metal Exchange nickel price at the close on Monday, with the latter trading back below $15,000 per tonne.

“There was no particular catalyst behind last week’s selloff, but we have to suspect that growing trade tensions across both sides of the Atlantic, as well as between the US and China are unnerving markets, with base metals being among those most affected,” INTL FCStone analyst Edward Meir said.

“Far from moving towards any de-escalation, the Trump administration continues to ratchet up the pressure,” he added.

Asian stocks opened broadly lower on Tuesday in response to the fears of an escalation in the tit-for-tat trade dispute between China and the US, with most of the base metals following suit. The exceptions being zinc and lead, with the latter showing steadier gains than the former.

“Lead’s fundamentals remain price supportive, with declining global stocks, record low treatment charges – which suggest a tight concentrate market – and a supply deficit in the first quarter of 2018 to boot,” Metal Bulletin analyst Andy Farida said.

Base metals prices

• The SHFE August aluminium contract price slumped 110 yuan to 14,030 yuan per tonne.
• The SHFE August copper contract price fell 200 yuan to 51,480 yuan per tonne.
• The SHFE September tin contract price decreased 500 yuan to 144,720 yuan per tonne.
• The SHFE August lead contract price was up 130 yuan to 20,110 yuan per tonne.
• The SHFE August zinc contract price inched up 85 yuan to 22,630 yuan per tonne.

Currency moves and data releases

• The dollar index was down by 0.11% to 94.21 as at 12.13pm Shanghai time.
• In equities, the Shanghai Composite was down 0.82% to 2,835.88 as at 11.30am Shanghai time.
• Data on Monday showed US new home sales came in at 689,000 in May, up 6.7% month on month and surpassing estimates.
• In data today, we have the United States’ Conference Board consumer confidence and the Richmond manufacturing index of note.
• In addition, US Federal Open Market Committee member Raphael Bostic is speaking.