LIVE FUTURES REPORT 27/12: SHFE base metals prices consolidate amid year-end lull; Ni drops 1.6%

With the exception of nickel and lead, the SHFE base metals were all up at the end of the morning session compared with their closes on Thursday; the most-traded February copper rose by 0.1% to 49,730 yuan ($7,106) per tonne, the February aluminium contract ticked up by 0.2% to 14,085 yuan per tonne, the February zinc contract rose by 0.6% to 17,955 yuan per tonne and the June tin contract was up by 0.3% at 137,920 yuan per tonne.

Meanwhile, the February lead contract was unchanged from its previous day’s close at 12,215 yuan per tonne and March nickel gave the worst performance of the complex with a drop of 1.6% to 110,630 yuan per tonne. Despite the decline, nickel is still up by 1.2% from its close of 109,330 yuan per tonne on November 29.

“Nickel prices dipped down after more short-selling emerged in this morning’s trading session. Current fundamentals are not support of prices; the stainless steel market – a major consumer of nickel – is experiencing lackluster demand and high availability of material in China. In addition, there is also ample supply of nickel in China,” an analyst based in Shanghai told Fastmarkets on Friday.

Other highlights

• Providing broad support to the SHFE base metals this morning this a weaker US currency; the dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.25% at 97.44 as at 11.30am Shanghai time. This compares with a reading of 97.62 at a similar time on Thursday.
• There are limited data releases scheduled for Friday with a European Central Bank economic bulletin and US crude oil inventories of note.