LIVE FUTURES REPORT 03/01: LME nickel price dips below $14,000/t after 3,000t inflow; tin suffers

The three-month nickel price on the London Metal Exchange was lower across morning trading on Friday January 3, with price action falling against a fresh inflow of just over 3,000 tonnes, while tin futures similarly lost ground.

Nickel’s outright price on the LME was recently seen at $13,840 per tonne, down from an intra-morning high of $14,280 per tonne.

Turnover was moderately high in nickel, with more than 3,500 lots exchanged as of 9am London time.

Pressuring the metal’s price lower were further stock inflows; the one this morning takes total inflows this week to above 13,000 tonnes, the bulk of which was delivered into LME-registered warehouses in Europe and Asia.

Meanwhile, forward spreads in LME nickel have narrowed slightly, with the metal’s benchmark cash/three-month spread recently seen in a $66.50-pe-tonne contango, shrinking from $72 per tonne on Thursday.

“If current events spook investors into squaring up equity portfolios, the fall in equity prices could well be spectacular and metals will not be able to survive that short-term storm even if the physical demand picture is starting to improve,” Kingdom Futures director and chief executive Malcolm Freeman said in a morning report, referring to a United States-led airstrike in Baghdad this morning that has caused both oil and gold prices to surge.

Elsewhere, the three-month tin price dipped below nearby resistance over the morning session, recently trading at $16,915 per tonne.

Over December, LME tin stocks climbed to their highest level in over a year at 7,125 tonnes, with price action now beginning to correct accordingly via a 1.5% drop this morning.

LME tin’s cash/three-month spread continues to flip between contango and backwardation, keeping investors cautious. The spread was recently seen in a $1-per-tonne contango.

Other highlights
  • Elsewhere in the complex, the three-month zinc price continues to trade in volatile swings above and below nearby resistance levels, with the metal’s three-month price recently seen at $2,294.50 per tonne.
  • Similarly, both aluminium and lead futures have also dipped below their respective $1,800-per-tonne and $1,900-per-tonne thresholds, while copper’s outright price is threatening a dip below $6,100 per tonne in a 1.4% slide.
  • In other commodities, Brent crude oil futures spiked by more than 4% this morning following news of the US airstrike, recently trading at $69.57 per barrel.
  • In European data released this morning, the French preliminary consumer price index (CPI) month on month for the December 2019 period was better than expected with a gain of 0.4%.
  • Meanwhile, the UK’s construction purchasing managers’ index (PMI) over the same period was worse at 44.4, missing an expected level of 45.8.
  • Later, the US will release its Institute for Supply Management (ISM) manufacturing PMI, along with crude oil inventories.

Hassan Butt

hassan.butt@fastmarkets.com

Published

Hassan Butt

January 03, 2020

10:24 GMT

London