LIVE FUTURES REPORT 28/06: Most SHFE base metals prices continue to recover on easing trade war concerns

“[United States President Donald Trump] indicated he was against using the harshest measures to curb Chinese investments. This appears to have been the trigger for a rally across the base metals sector,” ANZ Research noted on Thursday.

Lead was the outperformer in the morning session with its most-traded August contract on the SHFE rebounding to 21,270 yuan ($3,222) per tonne as at 10.30am Shanghai time, up 510 yuan per tonne or 2.5% from Wednesday’s close.

“The price [of lead] was strongly underpinned by robust demand from the battery sector and the recent output constraints at the major manufacturing base of [China’s] Henan province due to environmental inspections there,” an analyst based in Shanghai said.

Nickel was the second best performer this morning, with the metal’s most-traded September nickel contract on the SHFE climbing 1.7% as at 10.30am Shanghai time.

Despite easing supply-side concerns with 23 mines in the Philippines passing a review to check compliance with state regulations, nickel continues to benefit from declines in exchange inventories and the expectation of greater demand in line with the development of the electric vehicle sector.

In the other metals, zinc rose by 1% and copper increased by 0.4%, while tin and aluminium were the laggards with declines of 0.3% and 0.1% respectively.

Base metals prices

• The SHFE August copper contract rebounded 210 yuan per tonne to 51,690 yuan per tonne.
• The SHFE September nickel contract increased 1,960 yuan per tonne to 116,510 yuan per tonne.
• The SHFE August zinc contract rose 250 yuan per tonne to 23,165 yuan per tonne.
• The SHFE August aluminium contract edged down 15 yuan per tonne to 14,160 yuan per tonne.
• The SHFE September tin contract decreased 450 yuan to 144,510 yuan per tonne.

Currency moves and data releases

• The dollar index was down 0.05% to 95.24 as of 11.39am Shanghai time.
• In equities, the Shanghai Composite was up 0.24% to 2,819.89 as of 11.30am Shanghai time.
• In US data on Wednesday, core durable goods orders fell by 0.3% month on month in May, against an expected increase of 0.5%, while the headline reading declined by 0.6%. The trade deficit shrank to $64.8 billion in May, down $2.5 billion from $67.3 billion in April, and May pending home sales dipped by 0.5% year on year. US crude oil inventories plunged 9.9 million barrels in the week to June 22, against an expected drawdown of 2.5 million barrels.
• On the economic agenda today, we have preliminary consumer price index (CPI) data out across Germany, Spain and Italy as well as a European Central Bank economic bulletin. In US data, we have the final gross domestic product (GDP) print for the second quarter and unemployment claims of note.
• In addition, day one of the European Union Economic Summit in Brussels gets underway today, while US Federal Open Market Committee member Raphael Bostic is speaking.