LIVE FUTURES REPORT 20/06: SHFE base metals prices recover some losses after Tuesday’s decline

The most-traded August copper contract price on the SHFE stood at 51,840 yuan ($8,010) per tonne as at 10.45 am Shanghai time, up by 0.3% or 160 yuan per tonne from Tuesday’s close. This after a fall of 3.7% on Tuesday, when the base metals complex came under a wave of selling due to an escalation in trade tensions between the United States and China.

“Industrials were hit hard [on Tuesday] by the escalating trade conflict between US and China. Copper led the sector lower as investors become increasingly concerned that the tariffs that both China and US are proposing could impact economic growth,” ANZ Research noted on Wednesday.

Aluminium prices were the strongest performers of the SHFE base metals complex so far this morning, with the August contract price up by 1% or 140 yuan per tonne from Tuesday’s close at 14,245 yuan per tonne as at 10.45am Shanghai time. The contract price had fallen 2.1% yesterday.

“Market sentiment has worsened… Commodity and stock markets are falling… We’ve seen the [London Metal Exchange’s] three-month copper price nosedive to around $6,800 per tonne, and the US dollar index return to 95,” Citic Futures Research said, adding that sentiment does not look likely to improve in the short term.

The LME three-month copper price closed at $6,840 per tonne on Tuesday, down $124 per tonne from Monday’s close and $382 per tonne lower than a close of $7,222 per tonne on June 12.

Due to the rising concerns stemming from US-China trade dispute, Xianfei Ji, analyst at Guotai Junan Futures, sees continual weakness in both spot and futures markets and expects temporary support at 51,000 yuan per tonne for the SHFE August copper contract price.

Base metals prices

• The SHFE August zinc contract price was up by 15 yuan per tonne to 23,555 yuan per tonne.
• The SHFE July lead contract price was down 25 yuan per tonne to 20,055 yuan per tonne.
• The SHFE September tin contract price rose 900 yuan per tonne to 145,740 yuan per tonne.
• The SHFE September nickel contract price rose by 40 yuan per tonne to 113,080 yuan per tonne.

Currency moves and data releases

• The dollar index was up by 0.07% to 95.07 as at 11.31 am Shanghai time.
• In other commodities, the Brent crude oil spot price increased by 0.33% to $ 75.30 per barrel, and the Texas light sweet crude oil spot price was up by 0.12% to $65.08 per barrel as at 11.31am Shanghai time.
• In equities, the Shanghai Composite was down 0.59% to 2,890.66 as of 11.30 am Shanghai time.
• In US data on Tuesday, the National Association of Home Builders housing market index for the period of June came in at a reading of 68, down two percentage points from its previous figure.
• In data today, we have current account, existing home sales and crude oil inventories from the US of note.