LIVE FUTURES REPORT 23/10: Base metals start the week higher; copper consolidates

The three-month copper price recovered $22 per tonne but remained below the $7,000-per-tonne mark. Over 13,000 tonnes of copper was freshly cancelled in Busan this morning as stocks continue to fall.

Aluminium climbed $10 higher as it continues to consolidate at current levels. The metal has recently been supported by winter capacity cuts in China but the upside was capped this morning amid expectations that China’s light metal production will increase by almost 10% in 2017.

James Moore, Metal Bulletin’s analyst, noted that although supply-side reforms in China continue to support the underlying fundamentals as authorities have enforced outdated capacity closures, China continues to add new low-cost capacity and rising prices have encouraged smelters to restart previously shuttered capacity.

“Metal Bulletin Research currently predicts China’s aluminium production will increase by almost 10% in 2017 to 34.8 million tonnes,” Moore said.

Rusal released its third-quarter operating report this morning, noting that its aluminium production rose 1.1% quarter on quarter to 931,000 tonnes in the third quarter of this year.

Nickel continued to recover, trading $80 per tonne higher as it looks to climb back to the $12,000-per-tonne level.

Tin was the worst performer on Friday, plummeting over $400 per tonne – it has recovered slightly this morning trading $120 per tonne higher as stocks at LME-listed warehouses remains unchanged.

Copper consolidates

• The three-month copper price was up $22 to $6,974 per tonne.
• Stocks declined a net 4,175 tonnes to 283,450 tonnes, with a total of 14,150 tonnes freshly cancelled.
• Diversified-miner Vale increased its copper production 6.6% year on year in the third quarter of 2017, boosted by record output at its Brazilian Salobo mine.
• Total finished production came to 118,800 tonnes in the three months ended September 30, from 111,400 tonnes in the corresponding quarter of 2016, Vale said on Thursday October 19.

Base metals prices

• The three-month aluminium price was up $10 to $2,146 per tonne. Stocks declined 2,550 tonnes to 1,199,675 tonnes, with 7,750 tonnes freshly cancelled.
• Nickel’s three-month price was $80 higher at $11,815 per tonne. Inventories fell 1,986 tonnes to 385,956 tonnes, with 1,602 tonnes freshly cancelled.
• The three-month zinc price was up $30.50 to 3,129.50 per tonne. Stocks declined 1,325 tonnes to 267,625 tonnes.
• Lead’s three-month price was up $16.50 to $2,484 per tonne. Inventories fell 1,500 tonnes to 148,575 tonnes.
• The three-month tin price recovered $120 to $19,695 per tonne. Stocks were unchanged at 2,110 tonnes.

Currency moves and data releases

• The dollar index was up by 0.23% to 93.88. The primary support for the dollar came from higher US yields, with the two-year yield hitting a nine-year high as the progress in tax reforms boosted expectations of increased borrowing from the US government and a likely pick-up in inflation.
• In other commodities, the Brent crude oil spot price was down by 0.35% to $57.67 per barrel.
• “Today’s Chinese data started on a promising note with property price rise almost slowing to a standstill which was one the objectives of the government to both calm inflation down and stop investors using property as a speculative product,” said Malcolm Freeman of Kingdom Futures.
• “That would come under the heading of so far so good but raises the question of where the investors will turn next and could they come back into the commodity markets,” he added.
• The economic agenda is light today with the German Bundesbank monthly report, UK CBI industrial order expectations and EU consumer confidence of note.