LIVE FUTURES REPORT 29/11: SHFE base metals prices mixed amid risk-off sentiment; nickel falls 1.1%

Base metals prices on the Shanghai Futures Exchange were mixed during the morning trading session on Friday November 29, with the complex under pressure following a pick-up in tensions between China and the United States.

The lackluster performance comes while market participants await further news of progress in China-US trade talks, but recent optimism has faded after US President Donald Trump signed a bill in support of pro-democracy demonstrators in Hong Kong – sparking China to threaten “resolute countermeasures”.
“Signing the deal into law was expected. But has now left investors to speculate on the ‘resolute countermeasure’ China will take. And whether it would be enough to damage trade talks,” Stephen Innes, Asia Pacific market strategist at AxiTrader, said.
“Rising concerns about a US-China trade deal weighed on the base metals sector,” ANZ Research analyst Catherine Birch said in a morning note.
“Nickel prices fell even further as traders continue to dump the metal on fears of a weaker Chinese economy,” Birch added.
As it did on Thursday, nickel gave the worst performance of the SHFE base metals during the morning trading session. The most-traded February nickel contract slid to 110,330 yuan ($15,686) per tonne as at 10.39am Shanghai time, down by 1,200 yuan per tonne - or 1.1% - from Wednesday’s close of 111,530 yuan per tonne.
“The market has clearly moved on from the supply issues in Indonesia, with the focus now on faltering stainless steel demand. Stainless steel prices have been weak amid record high inventories,” Birch said.
The rest of the complex gave more of a mixed performance, but moves were relatively limited compared with the weakness seen in nickel.
January copper inched down by 60 yuan per tonne - or 0.1% - to 47,290 yuan per tonne, January aluminium edged up by 25 yuan per tonne - or 0.2% - to 13,835 yuan per tonne while January zinc slid by 100 yuan per tonne - or 0.6% - to 17,940 yuan per tonne. January lead was up 40 yuan per tonne - or 0.3% - to 15,520 yuan per tonne and January tin fell by 210 yuan per tonne or 0.2% to 138,320 yuan per tonne.
Other highlights
  • The Shanghai Composite index was down by 0.64% at 2,871.08 as at 11.30am Shanghai time.
  • The dollar index, which gauges the strength of the US currency against a basket of foreign currencies, stood at 98.32 as at 10.39am Shanghai time.
  • In data on Thursday, Germany’s preliminary consumer price index (CPI) showed a fall of 0.8% in October, slightly steeper than the 0.7% decline forecast. The United Kingdom’s Nationwide house price index rose by 0.5% month on month in November, up from 0.2% previously.
  • It is a busy day for data on Friday with German retail sales and unemployment change, French preliminary CPI and gross domestic product as well as the European Union’s CPI flash estimate and unemployment rate scheduled.
  • On Saturday, China’s manufacturing and non-manufacturing purchasing managers’ indices are due.

Karen Ng

karen.ng@fastmarkets.com

Published

Karen Ng

November 29, 2019

05:27 GMT

Singapore