LIVE FUTURES REPORT 26/10: SHFE base metals on the rise; copper prices up on short-covering

Base metals prices on the Shanghai Futures Exchange (SHFE) were higher across the board during Asian morning trading on Thursday October 26, supported by a weaker dollar, while copper prices received a boost from short-covering.

The most-traded December copper contract on the SHFE stood at 54,940 yuan ($8,272) per tonne as of 04:28 BST, up 350 yuan from Wednesday’s close, with around 195,000 lots of the contract having changed hands so far. Open interest fell to around 191,000 positions as of 03:41 BST from 193,512 positions at Wednesday’s close.

“Strong seasonal demand and expectations of tighter scrap supply in China is providing support to copper prices,” China’s Minmetals Jingyi Futures said on Wednesday. But the futures broker cautioned that there is correction risk for copper prices following its swift climb.

China is expected to tighten its scrap import policies with market participants estimating 300,000-1 million tonnes of China’s scrap copper imports could be affected by a ban.

Positive sentiment in the market ahead of major industry conferences is also boosting base metals prices, market observers noted.

LME Week kicks off in London on October 29 while the Cesco Asia Copper Week takes place in Shanghai at the end of November.

Rest of complex higher

  • The SHFE December aluminium contract price rose 225 yuan to 16,495 yuan per tonne.
  • The SHFE December zinc contract price jumped 460 yuan to 26,075 yuan per tonne.
  • The SHFE December lead contract price gained 240 yuan to 19,265 yuan per tonne.
  • The SHFE January tin contract price increased 670 yuan to 145,680 yuan per tonne.
  • The SHFE January nickel contract price edged up 490 yuan to 95,980 yuan per tonne

Currency moves and data releases

  • The dollar index fell 0.1% to 93.54 as of 04:23 BST, the low of 93.5 earlier in the day was the lowest since October 20. The index has eased after rising as high as 94.02 on Monday, the highest since October 6.
  • In other commodities, the Brent crude oil spot price rose 0.05% to $58.37 per barrel at 04:25 BST.
  • In equities, the benchmark Shanghai Composite Index rose 0.36% to 3,409.27.
  • In US data on Wednesday, new home sales hit 667,000 in September; house prices rose 0.7% in August, beating expected growth of 0.4%; while durable goods orders came in at 2.2% in September.
  • In EU data, the German ifo business climate came in at 116.7 for October, up from 115.3 in the previous month.
  • Economic data due later today includes US unemployment claims and pending home sales, while the European Central Bank (ECB) is set to announce its minimum bid rate later with a press conference by ECB president Mario Draghi to follow.
SHFE snapshot at 1128 Shanghai time
Most traded SHFE contracts
Price (yuan/t) Change since yesterday’s close (yuan)
Copper 54,940 350
Aluminium 16,495 225
Zinc 26,075 460
Lead 19,265 240
Tin 145,680 670
Nickel 95,980 490

LME snapshot at 0428 London time
Latest 3M LME Prices
Price ($/t) Change since yesterday’s close ($)
Copper 7,026 16
Aluminium 2,212 26
Lead 2,499 11
Zinc 3,222.5 31.5
Tin 19,850 -40
Nickel 11,940 75

Changjiang spot snapshot on October 26
Range (yuan/t) Change (yuan)
Copper 55,240-55,280 -360
Aluminium 16,230-16,270 30
Zinc 26,470-26,520 100
Lead 19,550-19,750 -50
Tin 143,500-145,500 250
Nickel 95,800-96,100 -1,250
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