LIVE FUTURES REPORT 27/04: SHFE aluminium, nickel prices up on renewed sanction concerns; copper lags

Base metals prices on the Shanghai Futures Exchange were mostly up during Asian morning trading on Friday April 27, with only copper prices weakening.

Concerns about long-term supply disruptions stemming from the United States’ sanctions against Russian aluminium producer UC Rusal heightened after Oleg Deripaska, Rusal’s major shareholder, said he had no plans to surrender control of the firm.

The US had said on Monday that it would consider lifting the sanctions if Deripaska, who is also co-owner of Russian nickel producer Nornickel, ceded control of Rusal.

The renewed supply concerns pushed aluminium and nickel prices on the London Metal Exchange upward overnight, with this strength filtering through to Asia this morning.

The July nickel contract price on the SHFE traded at 104,160 yuan ($16,453) per tonne as of 09.55 am Shanghai time, up by 0.8% or 810 yuan per tonne from Thursday’s close.

Meanwhile, the SHFE June aluminium contract price rose by 0.5% or 75 yuan per tonne to 14,440 yuan per tonne.

“Afternoon news that Oleg Deripaska has no plans to restructure Rusal, sent aluminium prices quickly higher… adding to underlying market volatility and tightening of the spreads,” Liz Grant, senior account executive at Sucden Financial Research, said late on Thursday.

But a stronger dollar kept a cap on gains in the two metals.

The dollar index was recently at 91.53 as of 11.25 am Shanghai time, up from 91.15 at roughly the same time on Thursday. The recent low being 89.23 on April 17.

Base metals prices

  • The SHFE June zinc contract price rose 140 yuan to 23,825 yuan per tonne.
  • The International Lead and Zinc Study Group forecasts the global zinc market will register a deficit of 263,000 tonnes this year.
  • The SHFE September tin contract price increased 840 yuan to 147,600 yuan per tonne.
  • The SHFE June lead contract price was up 15 yuan to 18,240 yuan per tonne.
  • The SHFE June copper contract price down 40 yuan to 51,550 yuan per tonne.
  • Freeport indicates that it has not received notice to stop production at Grasberg and that operations there are unaffected by new requirements proposed by the Indonesia Environment Ministry.
  • Early talks over labor negotiations at BHP Billiton’s Escondida mine in Chile got under way on Thursday, with discussions ending without a deal. The possibility of copper shortages could push prices higher in the immediate term.

Currency moves and data releases

  • The dollar index was down 0.05% to 91.53 as of 11.25 am Shanghai time.
  • In other commodities, the Brent crude oil spot price decreased by 0.33% to $74.44 per barrel, and the Texas light sweet crude oil spot price was down by 0.26% to $67.92 as of 09.55 am Shanghai time.
  • In equities, the Shanghai Composite was down by 0.45% to 3,061.22 as of 10.03 am Shanghai time.
  • US data on Thursday on was broadly positive with headline durable goods climbing 2.6% in March, beating expected growth of 1.6%. The core print disappointed, however, with a flat reading. Unemployment claims came in lower than expected at 209,000 and the trade deficit stood at $68 billion in March, down $7.8 billion from $75.9 billion in February.
  • The economic agenda is busy today with the United Kingdom’s preliminary gross domestic product (GDP) release and US data that includes advance GDP, employment cost index and the revised University of Michigan consumer sentiment and inflation expectations of note.
  • In addition, Bank of England governor Mark Carney is speaking.

LME snapshot at 02.55 am London time
Latest three-month LME Prices
  Price ($ per tonne) Change since yesterday’s close ($)
Copper 6,935.50 -29.5
Aluminium 2,268.50 -6.5
Lead 2,336 0
Zinc 3,124.50 -10.5
Tin 21,315 -85
Nickel 14,230 -5
SHFE snapshot at 09.56 am Shanghai time
Most-traded SHFE contracts
  Price (yuan per tonne) Change since yesterday’s close (yuan)
Copper (June) 51,550 -40
Aluminium (June) 14,440 75
Zinc (June) 23,825 140
Lead (June) 18,240 15
Tin  (July) 147,600 840
Nickel  (September) 104,160 810

Changjiang spot snapshot on April 27
  Range (yuan per tonne) Change (yuan)
Copper  51,610-51,630 -150
Aluminium 14,420-14,460 70
Zinc 24,170-24,220 120
Lead 18,350-18,550 0
Tin  145,000-147,000 500
Nickel  104,300-104,900 1,050
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