LIVE FUTURES REPORT 08/11: SHFE base metals prices mixed in the aftermath of US mid-term elections

With the Democrats winning a majority of seats in the US House of Representatives and Republicans retaining their hold of the Senate, ANZ Research commented that the “House is likely to pressure President [Donald] Trump with subpoenas (taxes, commercial dealings), to which he has pledged to fight back with investigations against leakers. Reform on healthcare, taxes and immigration are likely to enter gridlock”.

Outside of the US, though, the market has yet to see more volatility and growth risks as Trump maintains control over foreign policy and is likely to step up pressure on China, ANZ Research noted.

Consequently, mixed reactions were seen in the base metals complex. Aluminium, copper, lead, and tin prices registered gains, while zinc and nickel prices slipped further.

Aluminium’s most-traded January contract price rallied the most, rising 0.5% to 13,985 yuan ($2,019.69) per tonne, followed by lead’s most-traded December contract price, which increased by 0.4%. Tin’s most-traded January contract price went up by 0.2%, while copper’s most-traded December contract price move 0.1% higher.

The International Copper Study Group noted that the refined copper market is estimated to record modest deficits of 90,000 tonnes and 65,000 tonnes respectively in 2018 and 2019. Meanwhile, considering the nascent electric vehicle revolution, Fastmarkets analyst James Moore said the market is bound to see a rise in demand for copper in the long term, thus offering strong fundamental support to prices.

On the other side of the base metals spectrum, nickel’s and zinc’s most-traded January contract prices dropped 0.2% and 0.1%, respectively.

Base metals prices

• The SHFE January nickel contract was down 160 yuan per tonne to 96,960 yuan per tonne.
• The SHFE January zinc contract dropped 20 yuan per tonne to 20,740 yuan per tonne.
• The SHFE December lead contract rose 80 yuan per tonne to 18,470 yuan per tonne.
• The SHFE January tin contract was up 240 yuan per tonne to 146,730 yuan per tonne.
• The SHFE December copper contract increased 70 yuan per tonne to 49,610 yuan per tonne.
• The SHFE January aluminium contract rose 70 yuan per tonne to 13,985 yuan per tonne.

Currency moves and data releases

• The dollar index was up slightly at 96.18 as at 9.16am Shanghai time.
• In other commodities, the Brent crude oil spot price was at $72 per barrel as at 11.55am Shanghai time.
• In equities, the Shanghai Composite Index was up 0.52% to 2,655.07 as at 11.18am Shanghai time.
• In EU data Wednesday, the German final services PMI for October at 54.7 beat both the expected and the previous figure of 53.6.
• Italian retail sales were at -0.8% for October compared with the previous 0.6% and missing the expected -0.1% number.
• Also, in the US, crude oil inventories for October came in at 5.8 million barrels, better than the expected drop to 2 million barrels and surpassing September’s 3.2 million barrels.
• Thursday saw US total consumer credit rose $10.9 billion in September from the previous month, reflecting a smaller gain relative to the expected $15 billion increase.
• The US Department of Labor is also scheduled to release its latest unemployment claims report today.
• In Europe Thursday, the European Central Bank will publish its economic forecasts, while Germany and France are set to release their respective trade balance reports.
• Meanwhile, China is also expected to publish its trade balance figures in US dollar terms.