LIVE FUTURES REPORT 29/11: SHFE copper prices decline on stronger dollar; nickel buoyed

Copper prices on the Shanghai Futures Exchange were weaker during Asian morning trading hours on Wednesday November 29, with the combination of a stronger dollar and weak macroeconomic data keeping investor appetite subdued.

The most-traded January copper contract on the SHFE stood at 53,280 yuan ($8,069) per tonne as of 10.34am Shanghai time, down by 130 yuan from the previous session’s close.

The dollar index was up by 0.03% at 93.24 as of 10.30 Shanghai time. The index had reached a high of 93.34 on Tuesday, its highest since November 23.

“The market continued the downward slide from Monday on weakening Chinese macro data, slowing home sales figures noted yesterday, alongside a marginally stronger dollar, which prompted profit-taking and subsequently long liquidation in a quiet market,” Sucden Financial Research said late on Tuesday.

Compounding the weakness in the copper prices was the news that Southern Peru Copper Corp’s output had been unaffected by recent industrial action.

“Southern Copper said [Wednesday] that output was unaffected as striking workers continue to block a key road into the company’s main smelter,” ANZ Research said on Wednesday.

“This came amid reports that Peru is close to seeing the benefits of recent investment. The Deputy Mines Minister said output should rise strongly in 2018 after a 40% increase in investment in recent months bears fruit,” the bank added.

Furthermore, China’s sluggish copper consumption is also weighing on red metal prices.

“The continuous weak performance of copper is resultant from increased expectations that copper demand [in China] will weaken,” China’s Citic Futures Research said on Wednesday.

Zinc buoyed by stock drops

  • The most-traded January zinc contract price on the SHFE inched up by 75 yuan to 24,945 yuan per tonne.
  • London Metal Exchange zinc stocks fell a net 1,000 tonnes to 217,625 tonnes on Tuesday, following a 1,075-tonne decrease on Monday.
  • “Zinc prices are being supported by the low inventories in both the Chinese and international markets, as well as supply constraints on zinc concentrates,” Citic Futures Research said.
  • “Meanwhile, zinc consumption has grown weaker due to environmental scrutiny in zinc’s downstream sectors,” it added.

Others lower, bar nickel

  • The SHFE May nickel contract price rose by 300 yuan to 92,410 yuan per tonne.
  • The SHFE January lead contract price dipped by 50 yuan to 18,330 yuan per tonne
  • The SHFE January aluminium contract price dropped by 80 yuan to 14,685 yuan per tonne.
  • The SHFE January tin contract price fell by 110 yuan to 142,850 yuan per tonne.

Currency moves and data releases

  • The dollar index was up by 0.03% at 93.24 as of 10.30 Shanghai time.
  • In other commodities, the Brent crude oil spot price dropped by 0.13% to $63.23 per barrel while the Texas light sweet crude oil spot price was flat at $57.68.
  • In equities, the Shanghai Composite was down by 0.7% to 3,310.28.
  • US data overnight was mixed: consumer confidence beat expectations with a rise to 129.5 in November, hitting a 17-year high; the October advance trade deficit moved up to $68.3 billion from $64.1 billion previously; wholesale inventories fell by 0.4% in October, compared with a 0.1% rise in September.
  • Today’s economic calendar is quite busy with US data that includes preliminary third-quarter gross domestic product, pending home sales and crude oil inventories.
  • In addition, there will be Organization of Petroleum Exporting Countries (OPEC) meetings held throughout the day.
  • There are also a number central bank officials speaking today including US Federal Open Market Committee member William Dudley, Bank of England (BOE) governor Mark Carney, BOE deputy governor David Ramsden and US Federal Reserve chair Janet Yellen.

LME snapshot at 02.30am London time
Latest three-month  LME Prices
($ per tonne)
 Change since yesterday’s close ($)
Copper 6,833 28
Aluminium 2,108 5.5
Lead 2,435 8
Zinc 3,166.5 8.5
Tin 19,515 -35
Nickel 11,460 110
SHFE snapshot at 10.34am Shanghai time
Most traded SHFE contracts
(yuan per tonne)
 Change since yesterday’s close (yuan)
Copper  53,280 -130
Aluminium 14,685 -80
Zinc 24,945 75
Lead 18,330 -50
Tin  142,850 -110
Nickel  92,410 300

Changjiang spot snapshot on November 29
  Range (yuan/t)  Change (yuan)
Copper  53,170—53,190 -320
Aluminium 14,400 — 14,440 -170
Zinc 25,200—26,000 -50
Lead 18,200—18,400 0
Tin  142,000—143,500 0
Nickel  92,000—92,300 300
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