LIVE FUTURES REPORT 29/10: Imposition of Indonesian export ban drives SHFE nickel price up 0.9%

Base metals prices on the Shanghai Futures Exchange exhibited mixed movements during the morning trading session on Tuesday October 29 after positive developments in trade talks between China and the United States were partly offset by weaker Chinese corporate data.

“Progress in the US-China trade talks and the reduced risk of a hard Brexit are buoying sentiment against the backdrop of low inflation and monetary easing. [US President Donald Trump] said that the US and China are ahead of schedule in preparations for signing Phase 1 of the trade agreement,” David Plank, analyst at ANZ Research, said in a morning note.
This has continued to lend support to some base metals prices with zinc, lead and nickel recording marginal gains between 0.2% and 0.9%. Aluminium and tin drifted lower by 0.5% and 0.3% respectively, however. Copper was the only base metal to hold steady this morning.
Nickel gave the best performance in terms of percentage gains relative to its peers. The most-traded December nickel contract climbed to 133,270 yuan ($18,856) per tonne as at 10.06am Shanghai time, up by 1,190 yuan per tonne- or 0.9% - from Monday’s close of 132,080 yuan per tonne.
The stronger performance by nickel this morning comes amid growing supply concerns after the Indonesian government brought forward its ban on ore exports, initially to be implemented in 2022 but then advanced to January 2020, and imposed the prohibition with immediate effect on Monday.
In addition, a weaker US currency also lent some broad strength to the SHFE base metals this morning.
The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was at 97.77 as at 10.06am Shanghai time, compared with 97.88 at roughly the same time on Monday.
But disappointing Chinese data dampened sentiment to an extent, exerting some downward pressure on the base metals prices.
Industrial profits among China’s major industrial businesses shrank by 5.3% year on year to 575.6 billion yuan in September, compared with a year-on-year drop of 2% recorded in August, according to the latest data from China’s National Bureau of Statistics. The latest decline marked the steepest fall in four years.
Other highlights
  • Aluminium exhibited the worst performance among the SHFE base metals this morning, with the metal’s most-traded December contract falling to 13,755 yuan per tonne as at 10.06am Shanghai time, down by 70 yuan per tonne - or 0.5% - from Monday’s close of 13,825 yuan per tonne.
  • In European data on Monday, German import prices for October posted a month-on-month rise of 0.6%, beating expectations of 0.1%.
  • In data on Tuesday, a basket of data including pending home sales, the conference board consumer confidence from the US and M4 money supply data from Bank of England (BOE) will be of note.
  • In addition, Reserve Bank of Australia governor Philip Lowe is speaking today.

Amy Lv

amy.lv@fastmarkets.com

Published

Amy Lv

October 29, 2019

04:22 GMT

Shanghai