LIVE FUTURES REPORT 29/05: Nickel leads SHFE base metals higher; aluminium bucks the trend

Nickel prices on the Shanghai Futures Exchange (SHFE) continued their strong upswing since last Friday during Asian morning trading on Tuesday May 29 amid the backdrop of declining stocks and rising stainless steel prices.

The most-traded July nickel contract price on the SHFE rose to 112,510 yuan ($17,607) per tonne at 10.41am Shanghai time, up 1,990 yuan per tonne from yesterday’s close.

The nickel price had briefly climbed to 112,750 yuan per tonne couple of minutes earlier, hitting its highest level since May 2015.

Nickel inventories on the SHFE have been steadily declining since mid-January, with deliverable nickel stocks on the exchange dropping a further 714 tonnes week-on-week to 32,286 tonnes as of May 25. That compares with 57,395 tonnes held on January 12.

“Nickel plate supply is still tight; in addition, the continuous decline in nickel stocks has lent support to nickel prices,” Citic Futures Research said.

The positive performance of the stainless sector added to the upward pressure on nickel prices.

Stainless steel prices in the domestic China market have rallied since the start of May.

Metal Bulletin’s assessment of prices for benchmark 304 stainless cold-rolled coil in the major market of Wuxi was 14,800-15,300 yuan per tonne including VAT for the week ended Thursday May 24, compared with 14,200-14,800 yuan per tonne on May 3.

By contrast, aluminium prices were under pressure this morning due to weakening raw materials prices.
The most-traded July aluminium contract price on the SHFE dipped to 14,775 yuan per tonne on 10.41am Shanghai time, down 25 yuan per tonne from yesterday’s close.

Metal Bulletin’s assessed Chinese alumina price dropped to 2,950-3,000 yuan per tonne on May 24, compared with 3,100-3,200 yuan per tonne on April 26.

“The recent drop in alumina prices has lowered production costs for aluminium smelters,” Citic Futures Research said.

Other base metals prices rally

  • The SHFE July copper contract price moved up 70 yuan to 51,680 yuan per tonne.
  • The SHFE July zinc contract price rose 185 yuan to 24,085 yuan per tonne.
  • The SHFE July lead contract price gained 120 yuan to 19,990 yuan per tonne
  • The SHFE September tin contract price jumped 2,960 yuan to 153,450 yuan per tonne.

Currency moves and data releases

  • The dollar index was up 0.11% at 94.35 as of 10.41am Shanghai time.
  • In other commodities, the Brent crude oil spot price was down 0.6% to $75.67 per barrel as of 10.41am Shanghai time.
  • In equities, the Shanghai Composite was down by 0.19% to 3129.13 at 11.02 Shanghai time.
  • Yesterday’s economic calendar was light due to holidays in the United Kingdom and the United States.
  • In today’s data, the US Conference Board Consumer Confidence and Dallas Fed Manufacturing index are of note.
  • In addition, Yves Mersch, member of the Executive Board of the European Central Bank (ECB) is speaking later today.

LME snapshot at 0341 London time
Latest 3M  LME Prices
  Price ($/t)  Change since yesterday’s close ($)
Copper 6,880 -5
Aluminium 2,274 11
Lead 2,452 13.5
Zinc 3,080.50 29.5
Tin 20,760 610
Nickel 14,975 195
SHFE snapshot at 1041 Shanghai time
Most traded SHFE contracts
  Price (yuan/t)  Change since yesterday’s close (yuan)
Copper  51,680 70
Aluminium 14,775 -25
Zinc 24,085 185
Lead 19,990 120
Tin  153,450 2,960
Nickel  112,510 1,990
Changjiang spot snapshot on May 29
  Range (yuan/t)  Change (yuan)
Copper  51,390 — 51,430 180
Aluminium 14620 —  14,660 -30
Zinc 24,380 —25,380 230
Lead 20,250 —20,450 0
Tin  148,500—150,500 2,750
Nickel  112,500 —112,600 2,500