LIVE FUTURES REPORT 22/04: Al prices strongest of SHFE base metals amid quiet conditions

Base metals traded on the Shanghai Futures Exchange exhibited mixed moves during morning trading on Monday April 22, with volumes limited following the Easter holiday weekend.

With a number of markets closed in observance of Easter Monday and the dollar index in relative high ground, the SHFE base metals complex could find no clear direction; copper, zinc and tin prices were weaker, while those for aluminium, lead and nickel moved upward.

The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was at 97.38 as at 11.07am Shanghai time, slightly lower than 97.41 at a similar time on Friday. The index remains well above the psychological level of 97, weighing on investors’ appetite for commodity investment.

Aluminium outperformed its peers, however, seemingly buoyed by an improvement in the Chinese economy as the country’s most-frequently traded metal and a continued drawdown in on-exchange stocks.

The light metal’s most-traded June contract on the SHFE rose to 14,175 yuan ($2,114) per tonne as at 11.07 am Shanghai time, up by 0.6% or 90 yuan per tonne from Friday’s close of 14,085 yuan per tonne.

The Chinese economy grew by 6.4% year on year in the first quarter of 2019, above expectations for an increase of 6.3% and steady with the prior quarter, according to official data released last week.

In other releases, industrial production jumped by 8.5% year on year in March, surging past the expected 5.9% increase. Retail sales for March were similarly strong, up by 8.7% year on year and surpassing the forecast 8.4% growth.

In addition, aluminium stocks at SHFE warehouses continued to fall last week, providing further support to light metal prices. Deliverable aluminium stocks in SHFE sheds totaled 665,067 tonnes on Friday, down by 36,071 tonnes or 5% from 701,138 tonnes a week earlier.

There were slighter gains in nickel and lead this morning, while the rest of the complex trended lower as participants awaited further direction from US data due later today – see below.

Other highlights
  • The Shanghai Composite was down by 1.28% at 3,228.88 as at 11:30am Shanghai time.
  • In US data on Friday, retail sales were significantly better than expected with a jump of 1.6% (versus the 0.9% gain forecast). The country’s flash manufacturing and services purchasing managers’ indices (PMI) both disappointed with readings of 52.4 and 52.9 respectively in April.
  • In data today, US existing home sales will draw market focus.

Karen Ng

karen.ng@fastmarkets.com

Published

Karen Ng

April 22, 2019

06:25 GMT

Singapore