LIVE FUTURES REPORT 27/06: LME nickel price gathers momentum, breaches $12,650/t

Nickel’s three-month price on the London Metal Exchange continued its uptrend during morning trading on Thursday June 27, with short-covering activity pushing the metal’s outright price higher while trade optimism supports commodity investment.

Building on Wednesday’s gains, nickel futures are now trading 1.3% higher than Wednesday’s closing price of $12,490 per tonne, reaching an intra-morning high of $12,675 per tonne - its highest level since April.

While volumes traded were moderately thin over the morning, nickel’s 3,900 lots topped the complex as of 9.00am London time.

Similarly, fresh buying and forward lending has prompted some tightening of nickel’s forward spreads, with the September/three-month spread recently trading at $15 per tonne backwardation.

“In an otherwise dull market nickel is currently the star of the show moving above $12,500 per tonne,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning report.

“This, however, is not a reflection of a tight physical market, but the shorts who sold the market down into the $11,700-per-tonne [region] taking out huge scale-down buying and having to buy back as they reach their pain threshold,” he added

Elsewhere, despite fresh cancelations of around 13,000 tonnes this morning, copper’s three-month price continues to consolidate around the $6,000-per-tonne level.

The red metal’s availability in LME systems is now ample, with physical participants confirming that warrants for Russian, Chilean and India-origin material are now actively trading.

Meanwhile, participants dealing in the copper market are closely watching developments of copper concentrate treatment and refining charges (TC/RCs) for the third quarter, with Fastmarkets’ Asia-Pacific TC/RC index now at its lowest level on record at $53.50 per tonne/53.5 cents per lb.

Other highlights

  • The US dollar index was higher over the morning, up by 0.07% at 96.25.
  • In other commodities, Brent crude oil futures were trading 0.65% lower over the morning, recently seen at $65.90 per barrel.
  • Tin’s cash/three-month spread flipped into contango for the first time since August 2018 on Wednesday, recently seen at $2 per tonne, while the nearby cash/July spread was recently trading at $35 per tonne contango.
  • In US data released on Wednesday, core durable goods orders month on month for the June period were up by 0.3%, beating and expected rise of 0.1% and up from a fall of 0.1% last month.
  • In US data on Thursday, the third and final revision of annualized gross domestic product (GDP) for the first quarter is due. Forecasts are for GDP to be unchanged from the previous release at 3.1%.
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