“It is the holiday season and market activity is very thin because many people are on their vacation now,” a base metals analyst in Shanghai told Fastmarkets.
Participants have been winding down ahead of holidays this week and the next, which has led to scant activity in the market. Major markets across Europe and the United States were closed on Wednesday in observance of Christmas Day and will close again on January 1 for New Year’s Day.
Chinese participants also celebrate New Year’s Day next week but will be eyeing the Lunar New Year break which takes place on January 24-30.
Against this backdrop of limited trading activity, the SHFE base metals gave a mixed performance this morning.
Aluminium declined the most of among its complex; the light metal’s most-traded February contract sliding to 14,135 yuan ($2,021) per tonne at the close of the morning session, down by 100 yuan per tonne – or 0.7% - from Wednesday’s close of 14,235 yuan per tonne.
“Market participants were busy securing their long-term supply this month as it was the last month with settling time ahead of Lunar New Year. This squeezed spot market supply and made it bit of tight, which pushed the price up earlier. But now the price has come down due to an easing in the spot tightness,” an aluminium trader source in Beijing said.
Elsewhere, the February zinc contract fell by 0.3% to 17,900 yuan per tonne, the February lead contract dipped by 0.1% to 15,210 yuan per tonne while the rest were marginally higher.
The February copper contract ticked up by 10 yuan per tonne to 49,610 yuan per tonne, the May tin contract edged up by 0.4% to 138,540 yuan per tonne and the March nickel contract outperformed with a 0.5% gain to 112,610 yuan per tonne.
“Nickel benefited from more long buying in the overnight trading session, which pushed its prices up this morning,” a nickel analyst in Shanghai said.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.07% at 97.62 as at 11.37am Shanghai time. This is little changed from a reading of 97.67 at a similar time on Wednesday.
- The Shanghai Composite Index was up 0.35% at 2,992.41 at 11.30am Shanghai time.
- It is a light day for data on Thursday with most European markets still closed but US unemployment claims and a treasury currency report are scheduled.