LIVE FUTURES REPORT 27/09: LME copper prices strengthen; nickel plummets again

Copper and aluminium were the only base metals on the London Metal Exchange to close in positive territory this afternoon, Wednesday September 27, after the rest of the complex weakened.

The three-month copper price bounced $27 higher, the strongest performer of the day, while on-warrant stocks began to decline again after 13,350 tonnes was cancelled in multiple locations across Asia.

Aluminium prices moved $6 higher as they continue to remain stable at the current level over $2,132 per tonne.

“Most complexes should benefit from what is going on in China, specifically a conscious effort undertaken by the authorities to limit output across a number of metals groups. The question is whether these initiatives will be sustained and for how long and, more importantly, whether weaker demand could partially offset the impact of these cuts,” Edward Meir, INTL FCStone analyst said.

The strengthening dollar has put pressure on the rest of the base metals, as nickel prices dropped over $200 per tonne and remain vulnerable after steep declines last week.

The three-month zinc price dipped lower at the close but remains above $3,100 per tonne, the backwardation on the cash/three-month spreads is currently at $26.50 per tonne after hitting highs of $66 per tonne backwardation on Monday.

Copper prices edge higher

  • The three-month copper price is up $27 to $6,438 per tonne. 
  • Stocks declined a net 3,200 tonnes to 301,950 tonnes, with 13,350 cancelled – 7,850 in Busan and the rest in Gwangyang, Kaohsiung and Singapore. 
  • The increased possibility of a US rate increase at the end of the year will check the rebound of copper prices, China’s Minmetals Jingyi Futures said on Wednesday morning. 
  • “LME stocks continue to decline mainly via the cancellation of warrants but more eyes will be in the SHFE stocks at the end of the week where there are rumours of large drawdowns in copper,” Malcolm Freeman of Kingdom Futures said in a note. 
  • In copper data, China’s imports of refined copper rose 9.8% from last year but eased 10.1% from last month to 254,762 tonnes, while imports for copper ores and concentrates fell 0.2% year on year but rose 2.9% in the month to 1.44 million tonnes in August.

Base metals prices

  • The three-month aluminium price crept up $6 to $2,132 per tonne. Stocks declined 4,800 tonnes to 1,280,100 tonnes. 
  • Nickel’s three-month price was down $240 to $10,240 per tonne. Inventories were up 1,860 tonnes to 385,158 tonnes. 
  • The three-month zinc dropped $11 to $3,105 per tonne. Stocks declined 975 tonnes to 259,350 tonnes. 
  • Lead’s three-month price declined $26 to $2,462 per tonne. Inventories dipped 1,750 tonnes to 157,500 tonnes. 
  • The three-month tin price fell $10 lower to $20,700 per tonne. Stocks were unchanged for the second day in a row at 2,070 tonnes.

Currency moves and data releases

  • The dollar index was recently up 0.32% to 93.34, moving further away from recent multi-year lows.
  • In other commodities, the Brent crude oil spot price is down 0.82% to $58.05 per barrel. 
  • In data today, durable goods orders in August came in at 1.7%, just above the forecast of 1.0%. Core durable goods over the same period were in line with estimates at 0.2%. Later, pending home sales and crude oil inventories are due.
What to read next
An ongoing disruption to trade via the Red Sea and recent strength in some Asian markets are providing support to aluminium premiums across Europe, despite a continued period of low regional demand, participants have told Fastmarkets
Aluminium and nickel appear to have once again escaped inclusion in the latest list of sanctions imposed by western governments on Russia, ending days of speculation that increased both the prices and the traded volumes of the metals.
Fastmarkets launches MB-CU-0513 copper cathode equivalent grade (EQ), cif Southeast Asia, $/tonne on Tuesday February 20.
Fastmarkets’ 2024 outlook for key raw materials and ingredients used in the production and distribution of fast-moving consumer goods
Weak demand continues to stem profitability and prevent capacity return in the European aluminium market, Norsk Hydro’s chief executives told Fastmarkets in an exclusive interview on Wednesday February 14.
The publication of Fastmarkets’ rand fixing prices for LME trade for Monday February 12 were delayed due to a technical issue.