LIVE FUTURES REPORT 27/03: SHFE base metals prices rebound on weaker dollar, improvement in risk appetite

Base metals prices on the Shanghai Futures Exchange rebounded during Asian morning trading on Tuesday March 27, buoyed by a weaker dollar and an improvement in risk appetite after fears of an escalation in tensions between the United States and China receded.

Copper led the rest of the base metals complex higher with a gain of 1.4%, while tin was the laggard with a rise of 0.1%.

The most-traded may copper contract on the SHFE climbed to 49,660 yuan ($7,896) per tonne as of 10.30am Shanghai time, up by 660 yuan per tonne from Monday’s close.

Investors’ appetite for riskier assets picked up after fears of an escalation in the trade tensions between the US and China eased, with base metals prices supported by the renewed positivity in the market.

“Although the US tariff risk to global trade remains elevated and with the Chinese yet to respond, stock markets staged a recovery across the board. Positive comments from the US treasury secretary Mnuchin over the weekend that agreement can be reached with China,” Sucden Financial Research noted late on Monday.

All major US equity indices closed over 2.5% stronger on Monday, more than reversing the sharp losses recorded last Friday, aided by the positive mood after Mnuchin expressed optimism that the US can reach an agreement with China that will forestall the need to impose trade tariffs.

The dollar weakened in response to the risk positive mood seen in US equities markets, which further underpinned base metals prices.

The dollar index hit a low of 88.98 on Monday – its lowest since February 19. The index was slightly firmer at 89.1 as of 10.56am Shanghai time, but remains in relatively low ground.

The strength in Asia follows a positive performance by the base metals traded on the London Metal Exchange on Monday, where the complex, with the exception of copper, ended the day higher.

Base metals prices

  • The SHFE May zinc surged by 320 yuan to 24,960 yuan per tonne.
  • The SHFE July nickel increased by 1,110 yuan to 97,470 yuan per tonne.
  • The SHFE May lead rose 180 yuan to 18,585 yuan per tonne.
  • The SHFE May aluminium contract was up 125 yuan to 13,840 yuan.
  • The SHFE May tin price inched up 100 yuan to 142,360 yuan per tonne.

Currency moves and data releases

  • The dollar index was at 89.1 as of 10.56am Shanghai time – the index hit a low of 88.98 on Monday, which was its lowest since February 19.
  • In other commodities, the Brent crude oil spot price increased by 0.26% to $70.20 per barrel, and the Texas light sweet crude oil spot price was up by 0.12% to $65.69.
  • In equities, the Shanghai Composite was up by 0.96% to 3,163.87 as of 11.26am Shanghai time.
  • The economic agenda is busier today with M3 money supply and private loans from the European Union as well as data from the United States that includes the Standard & Poor’s/Case-Shiller Composite-20 House Price Index, CB consumer confidence, the Richmond Manufacturing Index and a speech from US Federal Open Market Committee member Raphael Bostic.

LME snapshot at 03.30am London time
Latest three-month LME Prices
  Price ($ per tonne)  Change since yesterday’s close ($)
Copper 6,686.50 84.5
Aluminium 2,061.50 9.5
Lead 2,394.50 7.5
Zinc 3,285.50 25
Tin 20,870 10
Nickel 13,095 140
SHFE snapshot at 10.30am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne)  Change since yesterday’s close (yuan)
Copper  49,660 660
Aluminium 13,840 125
Zinc 24,960 320
Lead 18,585 180
Tin  142,360 100
Nickel  97,470 1,110

Changjiang spot snapshot on March 27
  Range (yuan per tonne)  Change (yuan)
Copper  49,300—49,320 330
Aluminium 13,650—13,690 120
Zinc 24,980—25,780 360
Lead 18,650—18,850 150
Tin  142,000—144,000 0
Nickel  97,050—97,650 300
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