LIVE FUTURES REPORT 30/03: SHFE base metals prices consolidate; aluminium succumbs to follow-through weakness

The most-traded May aluminium contract declined to 13,705 yuan ($2,178) per tonne as of 10.16am Shanghai time, down by 0.8% or 115 yuan per tonne from Thursday’s close.

Overnight weakness in the LME’s three-month aluminium price has filtered through to Asia this morning, pressuring prices there downward.

The LME’s three-month aluminium contract hit a low of $1,996 per tonne overnight – the contract’s lowest since August 8, 2017.

“Aluminium therefore cost nearly $300 less than the multi-year high it achieved in early January. Almost all of the gains chalked up by aluminium in the second half of December (when it surged from $2,000 to $2,300 per tonne within a good two weeks) have meanwhile corrected again,” Commerzbank’s research note said.

Meanwhile, the uncertainty surrounding the impact of the United States’ Section 232 tariff on aluminium imports and the potential for it to affect global trade flows continue to cloud the light metal’s outlook.

“Besides the much gloomier technical picture, we believe that the US import tariffs that came into force last Friday are also contributing to the price slide. This is because the material originally destined for the US is likely to be sold elsewhere – but presumably at lower prices,” it added.

Alongside US import tariff worries, a 30,075-tonne delivery of aluminium stocks into LME warehouses in Port Klang has sent exchange’s on-warrant stocks back above 1 million tonnes, which was also a heavy hit to the market sentiment.

The rest of the base metals on the SHFE saw fairly limited movement this morning due to the closure of a number of major markets for the Easter holidays. The exception being tin which ticked up by 0.7%.

Participants will likely be looking ahead to the release of China’s Caixin manufacturing purchasing managers’ index (PMI) on Monday April 2 for further direction, with limited releases scheduled for today.

The LME will be shut on Friday March 30 and Monday April 2 due to the Easter bank holidays.

Base metals prices

• The SHFE May zinc contract declined by 190 yuan to 24,765 yuan per tonne.
• The SHFE May lead contract was down by 80 yuan to 18,655 yuan per tonne.
• The SHFE July nickel contract edged down by 70 yuan to 98,740 yuan per tonne.
• The SHFE May copper contract inched up by 20 yuan to 49,900 yuan per tonne.
• The SHFE May tin contract rose by 990 yuan to 142,770 yuan per tonne.

Currency moves and data releases

• The dollar index was down by 0.09% to 90 as of 11.05am Shanghai time.
• In equities, the Shanghai Composite was up by 0.17% to 3,165.94 as of 11.06am Shanghai time.
• In US data on Thursday, personal spending and income during February were both in line with expectations at 0.2% and 0.4% respectively. Core PCE price index also rose 0.2%, while weekly unemployment claims stood at 215,000 – the lowest since 1973.
• There is no major data scheduled for today due to a number of markets being closed for the Easter holidays, but participants will likely be keeping an eye on China’s Caixin manufacturing PMI scheduled for Monday April 2.