LIVE FUTURES REPORT 01/06: LME nickel hits 1-mth high; rest of complex consolidates

Nickel prices on the London Metal Exchange climbed 3% during morning trading on Friday June 1, reaching levels not seen since the metal’s mid-April sanction-related spike. Meanwhile, sideways trading takes effect across the rest of the complex.

Despite performing well over the week, nickel’s three-month price is trading marginally lower during the morning session, but continues to outperform the rest of the complex, reaching a high of $15,690 per tonne – its highest since April 19 – and recording a weekly rise of more than 6%.

“Base metals prices are reacting fairly calmly to the escalation of the trade dispute [with the United States]. No doubt China’s official Purchasing Managers’ Index for industry is playing some part in this, as it climbed unexpectedly to an eight-month high of 51.9 in May, which signals continued expansion,” Commerzbank Research noted. 

“Nickel above all is performing well, trading just under its mid-April three-year high. Falling LME stocks are driving up prices,” it added. 

Nickel volumes traded on the exchange are currently leading the complex at 5,800 lots as of 10:50 am London time.

Copper’s three-month price continues to consolidate around $6,850 per tonne, trading in a narrow high-low range of $39 per tonne while its cash/three-month spread remains in a contango of $7.25 per tonne. 

The red metal’s stagnancy comes amid wider trade tension concerns after US president Trump’s tariff impositions of 25% on steel and 10% on aluminium take effect from today, ending temporary exemptions for Canada, Mexico and the European Union. 

Elsewhere, zinc’s three-month price edged below the $3,100 per tonne support level, dropping gains made earlier in the week that saw the metal climb to a weekly high of $3,164 per tonne. 

Lead remains firmly above $2,400 per tonne as ongoing drawdowns in LME stock continue to prop prices after the metal surged 3.3% on May 21. 

Tin prices are showing similar resilience, hovering close to the $20,600 per tonne region and gaining 3.7% on the week. 

The metal’s cash/three-month spread has narrowed from a backwardation of $120b per tonne earlier this month, to its current reading of $30.63b per tonne.
 
Remaining predominantly static, aluminium’s three-month price continues to consolidate just below $2,300 per tonne, showing little reaction to the US’ decision to impose 10% tariffs on the light metal. 

Base metals sluggish; copper, tin up 

• The three-month copper price recently traded at $6,859 per tonne, recording an increase of $6. Copper stocks climbed a net 28,150 tonnes to 311,525 tonnes. Some 7,675 tonnes of material were freshly canceled across Asia and Europe. 
• The three-month aluminium price edged $10.50 lower to $2,281.50 per tonne. Stocks climbed 500 tonnes to 1,206,375 tonnes. Approximately 2,275 tonnes of material were freshly canceled in Port Klang and Busan, with 975 tonnes rewarranted in Gwangyang. 
• The three-month nickel price decreased $20 to $15,200 per tonne. Stocks fell 2,958 tonnes to 287,646 total tonnes. Some 816 tonnes of material was rewarranted in Kaohsiung, with 144 tonnes freshly canceled in Johor. 
• Zinc’s three-month price edged $14 lower to $3,086 per tonne. Stocks were down 100 tonnes to 245,650 tonnes with 550 tonnes freshly canceled in New Orleans.
• The three-month price for lead recently traded at $2,443 per tonne, down $15. Lead stocks were down 75 tonnes to 133,475 tonnes. 
• Tin’s three-month price increased $15 to $20,615 per tonne. Stocks were down 5 tonnes to 2,420 tonnes.

Currency moves and data releases 

• The dollar index was up 0.15% at 94.05.
• In other commodities, the Brent crude oil spot price was up 0.29% at $77.79 per barrel.
• In US data on Thursday, personal income in the US increased $49.5 billion – or 0.3% – in April, in line with forecasts.
• The economic agenda is fairly busy today with a host of manufacturing PMI data out across Japan, Europe and the US. Other US data of note includes average hourly earnings, non-farm employment change and the unemployment rate.