LIVE FUTURES REPORT 30/10: SHFE copper, lead prices pushed lower by stronger dollar; rest higher

Base metals prices on the Shanghai Futures Exchange were broadly higher during Asian morning trading on Monday October 30, however, copper and lead prices bucked the trend as they succumbed to a stronger dollar.

Copper and lead prices on the SHFE weakened this morning amid a stronger dollar following a healthy first estimate for US third quarter gross domestic product (GDP) growth, with copper prices coming under additional pressure from profit-taking and the expectation of greater supply in the coming weeks.

The SHFE’s most-traded December copper contract stood at 53,530 yuan ($8,046) per tonne as of 02:39 London time, down by 460 yuan from the previous session’s close.

In US data on Friday, third-quarter GDP rose at an annualized rate of 3.0% in the three months ended September, compared with an expected rise of 2.6%. The stronger-than-expected print saw the dollar index jump to its highest level since July 19 at 95.15. The index has since retreated - recently at 94.82 - but remains in high ground.

“The economy is running above the [US Federal Reserve’s] estimate of trend growth (1.8%) and appears to be accelerating, consistent with a Fed rate hike in December,” ANZ Research said on Monday.

Indeed, 97.2% of market participants expect that the Fed will raise rates to between 1.25% and 1.5% in December, according to CME Group’s FedWatch tool.

“[The] dollar index will remain strong this week, dragging down copper prices,” China’s Galaxy Futures noted, adding “profit-taking following the rally in copper prices … has also contributed to copper’s weakness.”

“From a fundamental perspective, more copper deliveries are expected in November – so we estimate greater supply as more imported copper flows into the Chinese spot market in the coming weeks. Meanwhile, we will be entering the low-consumption season for copper,” Galaxy Futures said.

Chilean copper producer Codelco has raised its annual cathode premium offer by 7% for 2018 on higher copper prices and inflated freight rates, Metal Bulletin reported.

Codelco has offered European customers 2018 cathode supply at a premium of $88 per tonne over London Metal Exchange prices, up from a seven-year low of $82 in 2017.

Rest of complex higher except lead

  • The SHFE December aluminium price rose by 15 yuan to 16,280 yuan per tonne.
  • The SHFE December lead price eased by 265 yuan to 18,370 yuan per tonne.
  • The SHFE December zinc price strengthened by 130 yuan to 25,700 yuan per tonne.
  • The SHFE January nickel price was up by 90 yuan to 92,630 yuan per tonne.
  • The SHFE January tin price increased by 400 yuan to 144,110 yuan per tonne.

Currency moves and data releases

  • The dollar index was little changed at 94.82 as of 02:46 GMT - the index had reached as high as 95.150 on Friday, its highest since July 19.
  • In other commodities, the Brent crude oil spot price decreased by 0.34% to $60.37 per barrel.
  • In equities, the benchmark Shanghai Composite Index declined by 0.73% to 3,392.03 as of 03:30 GMT.
  • The economic agenda is fairly busy today with German retail sales and preliminary consumer price index (CPI) data, UK net lending to individuals, M4 money supply and mortgage approvals, while US data that includes the core PCE price index and personal spending is also due.
LME snapshot at 0239 London time
Latest 3M LME Prices
Price ($/t) Change since Friday’s close ($)
Copper 6,830 -13.5
Aluminium 2,170.5 -14.5
Lead 2,432.5 0.5
Zinc 3,190 17.5
Tin 19,830 -370
Nickel 11,520 805

SHFE snapshot at 0239 London time
Most traded SHFE contracts
Price (yuan/t) Change since Friday’s close (yuan)
Copper 53,530 -460
Aluminium 16,280 15
Lead 18,370 -265
Zinc 25,700 130
Tin 144,100 400
Nickel 92,630 90

Changjiang spot snapshot on October 30
Range (yuan/t) Change (yuan)
Copper 53,720-53,740 -960
Aluminium 16,080-16,120 -100
Zinc 26,060-26,110 -40
Lead 18,700-18,900 -400
Tin 142,500-144,500 -250
Nickel 93,200-93,500 -900
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