LIVE FUTURES REPORT 12/03: SHFE base metals prices up across the board; nickel leads the charge

The most-traded July nickel contract on the SHFE stood at 104,530 yuan ($16,508) per tonne as of 02.48am London time, up by 3.7% or 3,710 yuan per tonne compared with last Friday’s close.

Nickel prices have been bolstered by declining stocks as well as the positivity surrounding the metal’s use in the electric vehicle sector.

Nickel stocks at LME warehouses fell by 1,890 tonnes to 328,998 tonnes last Friday, while those at SHFE-approved warehouses decreased by 1,359 tonnes to 328,998 tonnes.

“LME nickel stocks have declined by nearly 38,000 tonnes [since the start of the year],” China’s Galaxy Futures noted.

Meanwhile, a large 27,244-tonne cancellation of nickel warrants at LME-listed warehouses on Friday further underpinned prices for the metal.

The underlying support stemming from the positive picture for nickel from the electric vehicle sector is also continuing to buoy prices.

“Nickel is still enjoying overall bullishness … Growth in the electric vehicle market is likely to support nickel; it received further support on Monday after Chinese Premier Li Keqiang said buyers should continue to enjoy tax subsidies and non-cash incentives,” Metal Bulletin analyst Andy Farida said.

Meanwhile, stainless steel prices have been unable to replicate the success that nickel prices have had so far this morning with an accumulation of stocks, weak demand and soft prices keeping the stainless steel market under pressure, according to market participants.

Some stockists are planning to lower their prices further to draw down their inventories, market sources said.

Meanwhile, some mills are experiencing a drop in production costs, which may weigh on stainless steel prices further, they added.

“The weakness in the stainless steel sector is casting a shadow on the rally in nickel prices,” Galaxy Futures added.

Other metals also higher

• The SHFE May copper contract increased by 900 yuan to 52,090 yuan per tonne.
• The SHFE May aluminium contract edged 10 yuan higher to 14085 yuan per tonne.
• The SHFE April lead contract price rose by 55 yuan to 18,530 yuan per tonne.
• The SHFE May zinc contract jumped 395 yuan to 25,010 yuan per tonne.
• The SHFE May tin contract strengthened by 700 yuan to 147,160 yuan per tonne.

Currency moves and data releases

• The dollar index was down by 0.11% at 90.017 as of 11.34am Shanghai time.
• In other commodities, the Brent crude oil spot price was up by 0.06% to $65.58 per barrel as of 11.36 am Shanghai time.
• In equities, the Shanghai Composite was up by 0.51% to 3,324.17 as of 11.30 am Shanghai time.
• In data last Friday, China’s consumer prices rose by 2.9% year on year in February – the biggest jump in inflation since November 2013 and higher than expected growth of 2.5%. The country’s producer prices increased by 3.7% year on year last month, just below forecasts for a 3.8% rise.
• “The overall message from non-farm payrolls was one of robust broad-based jobs growth continuing in the US, but with wage growth remaining contained,” ANZ Research said on Monday.
• In US data, the country added 313,000 jobs last month, beating a forecast of 200,000. Wage growth, however, rose 2.6% on an annualized basis, coming in below expectations.
• The economic agenda is light today with the mainly the US Federal budget balance of note.
• In addition, there are Eurogroup meetings throughout the day.