LIVE FUTURES REPORT 26/05: LME copper price up 1.5%; 25k inflow of aluminium at Port Klang

Three-month base metals prices on the London Metal Exchange were mostly up during morning trading on Tuesday May 26, with copper giving the best performance of the complex in terms of percentage gains.

The three-month copper price was most recently trading at $5,369.50 per tonne, up by $81 per tonne (1.5%) from last Friday’s 5pm close of $5,288.50 per tonne. The LME was closed on Monday due to the spring bank holiday in the United Kingdom.
The three-month nickel price was up by $75 per tonne (0.6%) at $12,325 per tonne, while most of the other LME base metals were also trading higher this morning while they react positively to news of more economies opening up following coronavirus-related shutdowns.
“LME copper followed the [Shanghai Futures Exchange] contract higher… Asian stocks and US equity index futures gained as economies globally reopened, outweighing any geopolitical tensions,” analysts with Marex Spectron said.
The three-month aluminium price was little changed this morning at $1,505 per tonne, compared with a close of $1,506.50 per tonne last Friday, after gaining more than 3% last week.
Light metal stocks continue to rise with a further 25,400 tonnes delivered into LME sheds in Port Klang, Malaysia this morning. Over 70% of total aluminium stocks in LME warehouses are held in Malaysia. Total aluminium stocks now stand at 1.4 million.
This compares with deliverable aluminium stocks at SHFE warehouses, which declined for a ninth straight week by 8.6% to 322,060 tonnes last week.
Aluminium market participants continue to watch the spreads closely, which are one of the main drivers of physical premiums. The benchmark cash/three-month spread has narrowed to $25.50 per tonne this morning, from $33.50 per tonne a week ago.
“Everyone is watching the spreads and worried about it narrowing further. Cash and carry is how people are making their money right now, backwardations would cause issues,” a trader said.
Some forward spreads are also a cause for concern, the June/three-month spread is currently flat at $0 per tonne while the August/three-month spread has moved into a $0.50-per-tonne backwardation this morning.
Zinc was the only base metal in negative territory this morning, edging $13 per tonne lower to $1,972.50 per tonne.
Other highlights
  • The dollar index was down 0.35% this morning at 99.46.
  • According to the World Trade Monitor, global trade volumes fell by the most since 2009 in March, down 4.3% from a year earlier.
  • Data out later in Europe includes UK realized sales from the Confederation of British Industry (CBI) and there is a European Central Bank financial stability review report.
  • There is also new home sales and consumer confidence figures from the United States. US Federal Open Market Committee member Neel Kashkari is also speaking.

Alice Mason

alice.mason@fastmarkets.com

Published

Alice Mason

May 26, 2020

10:18 GMT

London