LIVE FUTURES REPORT 06/06: SHFE base metal prices rise on strong US data, upbeat World Bank outlook

The most-traded July copper contract price on the SHFE rose to 52,800 yuan ($8,238) per tonne as at 10.25am Shanghai time, up 510 yuan per tonne from Tuesday’s close price.

“The World Bank upgraded its projections for growth among the major economies, which indicates a decreasing risk for the global market. Overall, we see a healthy job market in the United States and the service industry is driving its economy well. Meanwhile, China’s wire and cable companies have a good operating rate now and will continue to support demand for copper. As such, we predict further upside for copper futures prices, with a ceiling of 53,500 yuan per tonne in the short term,” Xianfei Ji, analyst at Guotai Junan Futures, said in a report released on June 6.

The World Bank predicts that US growth will register 2.7% in 2018, aided by tax cuts, and China will expand 6.5% in 2018, up 0.2 and 0.1 points, respectively, from its January projections, the development lender said on Tuesday June 5 in its latest Global Economic Prospects report.

Shortly before the release of the figures, the US Labor Department had announced the economy added 223,000 jobs in May, sending its unemployment rate to an 18-year low of 3.8%, and that average hourly earnings had also increased 2.7% from a year earlier, more than projected.

The US non-manufacturing index released at the same time rose to 58.6% on stronger orders and sales, which is 1.8 points higher than the April reading of 56.8%, and beat market expectations of 57.6%. Readings above 50% indicate growth.

Zinc prices on the London Metal Exchange ended 2.4% higher at the close of trading on Tuesday June 5, reaching their highest since April 24, while three-month nickel and copper also finished strongly.

Base metals prices

• The SHFE July aluminium contract price rose by 110 yuan per tonne to 14,755 yuan per tonne.
• The SHFE July zinc contract price gained 355 yuan per tonne higher to 24,640 yuan per tonne.
• The SHFE September nickel contract price jumped by 1,780 yuan per tonne to 117,860 yuan per tonne.
• The SHFE September tin contract price rose 990 yuan per tonne to 152,700 yuan per tonne.
• The SHFE July lead contract price dipped by 10 yuan per tonne to 20,590 yuan per tonne.

Currency moves and data releases

• The dollar index was down by 0.05% at 93.81 as at 12:00am Shanghai time.
• In other commodities, the Brent crude oil spot price was up by 0.68% to $75.63 per barrel as at 12:00am Shanghai time.
• In equities, the Shanghai Composite was down by 0.15% to 3,109.61 as at 11:30am Shanghai time.
• No significant data due out today.