LIVE FUTURES REPORT 18/12: Positive sentiment boosts SHFE base metals prices; copper highest in three weeks

The most-traded February copper contract on the SHFE was at 53,520 yuan ($8,096) per tonne as of 11.09am Shanghai time, up by 600 yuan from Friday’s session close, with around 211,000 lots traded so far. The price jumped as high as 53,860 yuan per tonne sp far on Monday, the highest since November 28.

“A strong finish to [last] week, helped by more positive economic data should help the commodity sector start the week on a positive note,” ANZ Research said on Monday.

Base metal prices had surged last week as global economic data continued to paint a positive picture of economic growth around the world – industrial production rose in China, PMIs in Europe were exceptionally strong while US manufacturing production rose for the third straight month, the bank noted.

“This helped pushed copper and other metals higher as investor appetite improved,” ANZ added.

Sentiment in risk asset markets is also being boosted by expectations that US lawmakers could pass a long-awaited tax bill this week, with president Donald Trump possibly making it law by Christmas.

“A significant amount of positive sentiment had been baked into markets in hope of a ‘giant tax cut for Christmas’ as promised by President Donald Trump, pumping up the importance of the vote next week,” Jingyi Pan, IG’s market analyst, said last Friday.

In copper data, SHFE copper stocks fell by 16,016 tonnes or 10.1% over the past week to 142,129 tonnes on December 15.

“We remain positive on copper over the very short-term, expecting the rebound to continue to the end of the year. Our view reflects a positive macro environment, which should continue to elicit investor interest into cyclical assets like copper,” Boris Mikanikrezai, an analyst at Metal Bulletin Research, said.

“Over the next three months and beyond, we also have a constructive view because we think the concentrate market will tighten, which will in turn affect the refined market. Demand should prove robust.”

The London Metal Exchange three-month copper price had surged as high as $6,913 per tonne on December 15, the highest since November 28.

Rest of complex higher

• The SHFE February aluminium contract price rose by 30 yuan to 14,480 yuan per tonne.
• The SHFE February zinc contract price gained 105 yuan to 25,460 yuan per tonne.
• The SHFE May nickel contract price surged 3,200 yuan to 93,310 yuan per tonne.
• The SHFE February lead contract price increased 190 yuan to 19,175 yuan per tonne.
• The SHFE January tin contract jumped 1,600 yuan to 135,990 yuan per tonne.

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Currency moves and data releases 

• The dollar index was down by 0.08% at 93.89 as of 11.02am Shanghai time.
• In other commodities, the Brent crude oil spot price was up 0.13% to $63.30 per barrel as of 11:00am Shanghai time.
• In equities, the Shanghai Composite was up 0.02% to 3,266.64.
• In US data from last Friday, the capacity utilization rate came in at 77.1%, while industrial production ticked up 0.2%. The Empire State Manufacturing Survey in December disappointed with a 18.0 reading, below the forecast of 18.8.
• The economic agenda is light today, with European Union final CPI and final core CPI, and US NAHB housing market index numbers being of particular note.
• The market will also look to China’s Central Economic Work Conference this week, which will provide insights into China’s economic agenda for next year.